In our latest Walker Webcast, we examined the medical, social, and economic implications of COVID on a major US city: Miami.
The Mayor of Miami, Francis Suarez, joined Willy Walker is chairman and chief executive officer of Walker & Dunlop, to discuss:
Willy Walker is chairman and chief executive officer of Walker & Dunlop. Under Mr. Walker’s leadership, Walker & Dunlop has grown from a small, family-owned business to become one of the largest commercial real estate finance companies in the United States. Walker & Dunlop is listed on the New York Stock Exchange and in its first seven years as a public company has seen its shares appreciate 547%.
Franis Suarez is an American attorney and politician serving as the 43rd mayor of Miami. He was elected on November 7, 2017 with 86 percent of the vote. Suarez is the first Miami-born mayor. He is a registered Republican, but the office of the City of Miami Mayor is nonpartisan. He previously served as City of Miami Commissioner for District 4, a position he held since he was elected in a runoff election on November 17, 2009. Suarez is the son of former Miami Mayor and current Miami-Dade County Commissioner Xavier Suarez.
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WW: Mr. Mayor, good afternoon and it’s a real pleasure to have you with me.
MS: Thank you Willy, it's a pleasure to be with you.
WW: Nice to see you.
MS: Nice to see you too.
WW: So, Mr. Mayor you were born in Miami and your father Xavier was a two-time mayor of Miami in the 1980’s. In doing a little bit of research on you I saw that your father was one of 14 children and was the first Cuban born Mayor of Miami. With 13 aunts and uncles you must have a ton of first cousins, do you know all of them?
MS: I have over 50 first cousins, I know them sort of peripherally but I don't have close relationships with all 50 of them. I probably couldn't list them all, that's for sure, but I've met probably all of them over the course of my lifetime but it's hard to keep a relationship with 50 people. But, yeah, my dad was the first Cuban born mayor and I'm the first Miami born mayor in the history of the city so it's an interesting, and we’re the first father and son in the history of this city so that's a neat little fun fact, history quiz fact.
WW: That’s really neat, and what percentage of your family is in the states versus still in Cuba?
MS: Everybody is here in the States now, there's almost no members of the family that are in Cuba anymore.
WW: You and your father have both spent a lot of time as mayor focused on two significant issues, transportation and affordable housing. Why are those two issues so important to you?
MS: If you look at the three largest expenses in a person's, in an individual's economic panorama, you've got food, shelter and transportation and so affordable housing and transportation go to two of the three most important expenses that anyone has to pay in their economy, in their personal economy, so for me those are always two things that we need to focus on as a city. We have one of the most unaffordable cities in the country and we also are a city that grew very horizontally from our downtown, so we did not have an adequate and don't still have an adequate mass transit system yet. We are making some progress and hope to make continued progress into the future.
WW: Let's talk about the housing affordability for one moment Mayor Suarez because the one side of the coin is unaffordable housing for Miami residents. The flip side to it is a huge amount of interest and influx of capital and investments from both Florida residents as well as people from outside of the state. Right now, during the pandemic, housing prices in Miami-Dade county have gone through the roof and new records are being set for single family homes out on Fisher Island and other places like that. Are you a little concerned about, two things, one affordability and second of all a bubble at the high end of the market?
MS: I think you framed the problem correctly. We've got an abundance of capital chasing a finite, asset which is land, so we're a victim of our own success, if you will, right. So before, we used to get investment from Europe, North America, obviously the United States, New York, etcetera and somewhat from South America and Mexico. Now we're getting, we're seeing investment from everywhere in the world, whether it's India, Turkey, China, Russia, the Middle East, we're seeing investment from places that we did not traditionally get investment from over the last few years so that has definitely pushed prices up and it's forced us to be creative. What we've been doing is we've been looking at the property that we own, not just we as a city but the county as well and finding ways to leverage the dollars that we have. We borrowed $100 million for affordable housing, an affordable housing bond, and we're trying to match those dollars to what I call “zero basis land” which is a fancy way of saying free land so that we can build as much affordable housing as possible and create a city that maintains its rich diversity of incomes and of cultures.
WW: So you and I have both been working on a big project in an opportunity zone in Miami to try and create hundreds of new affordable units using both that financing that you have raised as well as HUD financing and opportunity zone tax financing that is going to make those units both affordable as well as new inventory which will be fantastic housing for Miami residents. What else can be done Mr. Mayor as it relates to this issue of affordability of housing particularly given just the real pressures that you have as it relates to foreign capital and capital from other states coming into the Miami area?
MS: The product that you talked about is a great example. What you all did was you found a way to help us close the donut hole, and the donut hole is workforce housing. What happens is in the product that you’re referring to which is in the Omni area, it's an area where traditionally you would start to see market rate housing going up and what we were able to do is we were able to find a blend of capital resources, capital stack, which was in part obviously HUD financing as you said, CRA community redevelopment agency dollars and stack that up and give the developer an option of instead of having to do something that's market rate doing something that's workforce housing. And so the beauty of that project is now we have built a project in an area that was building basically luxury condominiums and luxury rental units and we're being able to offer them to police officers, to firefighters, to nurses, those members of our community that work tirelessly to keep us safe particularly during COVID and just can't afford to live in the city of Miami, they have to live in the suburbs. So the lesson I think is, aside from hiring your firm, the lesson is to think outside of the box, is to be creative and honestly you all were an essential part of that, we would not have gotten that project going but for your analysis and your advocacy with HUD, and so it is important to partner with the right people and partnering with people that know what they're doing and understand, because listen federal regulations are extremely complex and then obviously having relationships is a second part and so the blend of having experts that know the regulations backwards and forwards plus relationships is what gets a project like that done.
WW: Mr. Mayor before we move off of housing one final question on that. Climate change is clearly on many people's minds and in a city like Miami that has both risk of hurricane as well as risk of flooding how big a concern is that in your mind and what are you doing in Miami to make it so that the city can continue to grow and expand and if you will weather the upcoming storms that many, many scientists predict are coming?
MS: Yeah, we're seeing every year more and more storms. This year we went into the Greek alphabet to name storms, we're at Delta so it really is a very active year. We're lucky we didn't get hit with any but we're one of the first cities and the only cities in the country that I think is taking this threat seriously. We created a bond that was voter approved which rarely ever happens that voters actually approve the tax themselves called Miami Forever and the concept of the Miami Forever bond is we want a Miami that’s going to be here for our children and our children's grandchildren and that's the kind of Miami we're creating and we're not just talking about it we're putting our money where our mouth is so we are actually dedicating $200 million in resources to upgrade our infrastructure. Post Hurricane Andrew we were the most wind resilient city on the planet. The windows that you see back here, this is a historic building, they were all replaced and they're all-impact windows. So we have one of the most resilient cities on the planet. But now we are challenged to become the most water resistant city on the planet and when you see storms like hurricane Dorian that barely missed us last year but devastated the Bahamas with category five winds and with storm surge that was 15 to 23 feet we realize that we still have a long way to go before we can be prepared for an event of that magnitude.
WW: Let's shift Mr. Mayor to COVID. One of the things I love about speaking to an elected official like yourself is that you are really, you're on the ground, you're seeing what happens every single day and so not to in any way criticize national politicians but they're in Washington trying to make big sort of national policy and big platitudes whereas when you're at the mayor level you're dealing with these issues every single day. And we've obviously seen the number of COVID cases in Florida spike in the summertime and then come back down and we're now seeing a resurgence; I think it was about 2,750 cases yesterday. You're having to deal with managing both the reality of a very significant health threat and at the same time trying to make sure that your economy can get back up and going and be sustained because we all know that there are many other implications of not getting the economy up and going and getting people back to work. Talk for a moment Mr. Mayor of how you’ve managed those two in some instances conflicting pressures on you.
MS: They're completely conflicting pressures, they have a reverse correlation, right. The safer that you try to make it by creating more and more restrictions the more damage that you do to the economy and vice versa. The more you open up the better it is for the economy but the more at risk people are so it's been a very delicate balance. We've tried to do it, obviously in my case, by first creating a team of experts that would guide me and give me good advice. Secondly, we’ve been able to leverage some of our relationships at the federal level so I have a weekly call with the Coronavirus Task Force and that's just me and the county mayor, just the two of us, and that's Doctor Fauci, Doctor Birx, Doctor Redfield who is the CDC Director and Doctor Adams who is the Surgeon General. So we're getting advice not just from local experts but from national experts.
And then obviously you've got to make tough choices. Any person that's in leadership understands that you've got to make tough choices and then you have to clearly articulate them and they have to be apolitical and I know it's hard in a time where we're in the midst of a presidential election to say that anything is apolitical but I think one of the things that people have seen in me and my leadership is I've tried to be straightforward, I'm not really on anyone's agenda per se, I'm just trying to promote getting a city that can open as quickly and as safely as possible and minimizing the health risk to my residents. So, we monitor the cases daily, we go as far as monitoring the 911 calls, we monitor the 911 calls. There are so many different metrics, we monitor the 911 calls, we monitor the daily hospitalizations, we monitor the new case positives, we monitor the ICU’s, we monitor the ventilators, so we're monitoring every single step of the way to see if there's something that should worry us and frankly there's a lot going on with COVID right now, you had the Governor's order of a few weeks ago, you have schools opening as of last week, so there's a lot of things going on that could create a perfect storm for another spike and we're just hopeful that that doesn't happen.
WW: You've been incredibly successful at managing those two sides of the equation, if you will. Peter Linneman from Wharton, former Wharton professor, published a research report last week that had Miami in the number five spot as it relates to cities in America that reclaimed more jobs than any other city. So the list goes Indianapolis, Kansas City, Cincinnati, Tampa, and then Miami is tied with Jacksonville and Austin for fifth place at 50 percent of the jobs you lost at the beginning of the COVID crisis already back by July. As I think about your economy being so dependent upon tourism and travel and cruises and things of that nature I'm astounded that you're in that top five. What was it that you and your fellow citizens were capable of doing to put Miami into that top five?
MS: Well first they hired a great mayor. No, I’m just kidding.
WW: We all know that, I wouldn’t have had you on if you weren't.
MS: No, listen, this has been the work of the residents of the city. I think there's a misperception that Miami is only about nightlife and tourism and I think what we just saw right now with Blackstone choosing to locate its headquarters in Miami. Miami is becoming a tech city, we're diversifying our economy, our construction industry never stopped which is an enormous industry in our city. Our city is very entrepreneurial. Our restaurants found ways to be successful. What we did was we allowed them to use some of our public right of way to Increase their outdoor seating so that they wouldn't take as big a hit so that was a big factor. And now we're starting to see bars and nightclubs come back online after the Governor's order but one of the things that we've done is we've tried to balance it with making sure that people still wear masks. I think the biggest, I would say that the one big adjustment that we made from the first wave to the second wave was in the first wave we simply ordered everybody to stay at home and I think in the second wave we did something that had almost the same effect but didn't paralyze the economy which was ask people or actually order people to wear masks in public. Wearing the mask in public reduced our infection rate from 3,500 new cases a day, when you're talking about 2,700, that was statewide, we had at one point 3,500 only in Miami-Dade County in one day. We reduced it from that to, I think yesterday's numbers were 400 and something, so we reduced it by about 90 percent, 85 percent from its peak. So we did that by being disciplined, creating good habits, making those habits become the normality and then not being punitive with opening our economy because we realized that we never want the punishment to be greater than the cure if you will. So we're constantly striving to do the very best that we can because we obviously want our economy open as quickly and safely as possible.
WW: On that let me ask you about an interesting if you will paradigm that's existing in your state this coming Saturday which is that, my understanding is that Governor DeSantis has taken the state back to phase three as it relates to overall protection from the COVID virus which means that fans are welcome to go back into stadiums to full capacity. So it's my understanding that this coming Saturday in Gainesville, the Florida Gators will be playing LSU to what could be a packed stadium, whereas at the University of Miami this coming Saturday the athletic director has held the limitation inside of Hard Rock stadium at 20 percent to protect against potentially having a super spreader event. So here we are in your own state, we've got two great football teams that are playing this Saturday and one's going to be potentially in a packed stadium and the other one at 20 percent. How do you, which side of that are you kind of coming down on if you will?
MS: I thought you were going to say that Miami Hurricanes only draw 20 percent attendance but I'm glad you didn't go there. Look, I think what the Governor has done I would say almost the entire time throughout this pandemic is he has given Dade County the liberty to go at its own pace. Miami, even Jacksonville, which is technically the largest city because it's a city-county and it's got about 800,000 population it’s technically larger than Miami as a city, Miami is by far the densest. So I think what happens is the risks are different in different parts of the state. I think even though the Governor wants to have a full stadium, the Dolphins and the Hurricanes, both the Dolphins and the Hurricanes have agreed in the ownership that it's not quite, we're not quite there yet. That doesn't mean that we're not going to be there in a week or in two weeks or in three weeks, but I think it’s imperative that we be prudent. The Dolphins have spent a ton of money making the stadium, let's call it COVID proof, it's hard to COVID proof anything but certainly have spent a lot of money to make it touchless and make it as sanitary as possible. But listen I hope it goes well, I went to University of Florida law, so I hope it goes well for the Gators, not just in the game but with those number of fans but that's always a risk, it's scary, it's risky and if it doesn't go well then they're always going to look back and say why'd you do it. So to me I think easing into it is probably the better route for us in Miami-Dade so I commend the Dolphins and the Hurricanes for having the courage not to necessarily just follow right off the bat and sort of see how it goes for other people.
WW: On a similar theme Mr. Mayor the cruise industry is obviously very important to the Miami economy and the CDC banned cruises starting back in March and weren’t expected to allow for cruises to start again until February and then the White House came and overruled that and has allowed for cruises to start on November 1. It's my understanding that only Carnival Cruises has said that they will start sailing in the month of November but given the importance of that industry to the Miami economy what's your take on the acceleration of the you're free to cruise, if you will?
MS: Yeah, it's very important to the Miami economy, like you said it's great to be in that top five list given the fact that so many sectors, important sectors of our economy are not working. For example, the cruise industry is a huge sector. Indianapolis, which was on the list, I think it was number one if I'm not mistaken, they don't have a cruise industry that I'm aware of, maybe they do, but I think it's important and tourism is not as big a factor for them either so I think making that list is even more impressive like you said because some of these things have been shut down. Look, I think the cruise industry, their biggest issue is going to be sort of a crisis of confidence that I think, it's going to be trying to attract people, right, so it's one thing to say we're open, it's another thing for people to actually go. Our hotels, some of our hotels have struggled with not having sufficient occupancy irrespective of the fact that they're open to basically pay their basic expenses so I think that there's a fine line there. I think they have to, I think the first thing they're going to have to gain the public's trust that they can go on cruises without there being a danger, that you're going to get stuck on the cruise if there's a COVID person on board, that if you have COVID and you're on board or there's an outbreak you're not going to be able to get off, which were some of the things that were happening during that time. So they're going to have to address those issues, they're going to have to have safety protocols that are going to make people feel safe and I hope that they can open as quickly as possible because obviously a tremendous amount of jobs are at stake.
WW: Yeah, on that balance and on safety, Mr. Mayor, the Faena Hotel in Miami Beach was just ranked the 12th best hotel in the world by Conde Nast Traveler and I was thinking about that would be a really a great place to go and yet Florida remains on a number of state lists where if you go to the state you have to come back and quarantine and so it's one of these things where even if someone has the interest in going, if they live in New York for instance and they want to go down to Miami to stay at this incredible hotel in Miami Beach, if they come back to New York they have to quarantine for two weeks. How much, if you will, discussion/negotiation is going on between cities and states today to make it so that commerce can actually happen, forget about the inbound flight from Buenos Aires that will hopefully at some point bring in that international visitor but there seems to be tension amongst cities and states right now, how are you dealing with that?
MS: Yeah Willy, part of the issue obviously is we're not blind to the fact that there is a presidential election in the next three weeks and there's a heightened I think sense of partisanship sometimes that goes into some of this and maybe a little bit of one-upmanship. I don't think that New York was so happy when our Governor created a quarantine from people traveling from New York to Florida and maybe there was a little bit of, hey, now that you guys are not doing so well we're going to do the same thing to you. I think we need to get past all that. I'm going to put in a call to the New York governor's office and ask him, I think it's time, we've again diminished the number of cases significantly and I really do think it's time for us to be able to lift that ban and there's no particular threat that Miami presents to New York nor is there a threat that New York presents to Miami. And frankly we're getting a ton of New Yorkers who are coming to Miami to live in Miami, to invest in Miami, to relocate to Miami, and it's got nothing to do with COVID it probably has more to do with the tax structure of what’s going on. I think COVID maybe exacerbated things a little bit but I think before COVID we were growing incredibly, we grew my first year as mayor 8.5 percent, my second year 10.5 percent and my third year 6.5 percent and we had at the same time the lowest homicide rate since 1954, not adjusted for population growth, so irrespective of our population growing significantly in that amount of time, that's an aggregate number, and we had the highest bond rating as a city in the history of the city so everything was going very, very well. Obviously in life adversity hits you and you've got to make adjustments and I think everybody's gone through that and we are no different. But like you said we're bouncing back fast and we hope to bounce back like we always have in the past as fast as possible so that it doesn't hurt people like our employees or our residents.
WW: So as you mentioned we have an upcoming election in two and a half weeks. You have the President coming to Miami tomorrow night to do a town hall on NBC after the cancellation of the second presidential debate. Clearly back in the 2000 election Florida had the, I guess it's the dubious honor of being the hotspot that had the hanging chad and now we're headed into this election where last week the voter registration system in the state of Florida, many at first thought had been hacked, it just had a malfunction, it had a software glitch, where the Governor extended the registration for I believe it was seven hours but you saw how quickly the lawsuits came and both sides are sitting there saying we've got real issues as it relates to voter registration and the actual election. How do you feel as it relates to the overall systems in place and that on November 3 we're going to have a clear read out of the people's will, if you will?
MS: I can't speak for obviously the entire country, obviously we've made significant strides since the year 2000, so 20 years. I can tell you in Dade County the system is far better than it was 20 years ago. Now it's sort of a scantron that gets immediately uploaded so the results are also tabulated much faster. It's no longer the punch ballots that there were in 2000 which created so many problems. I feel confident that at least in Miami-Dade county we're going to know the results fairly early, I'd say maybe even before 10:00 p.m. the night of the election, that's been the norm, obviously turnout is a big issue and we want people to turn out. What I think you have to be careful with is the rhetoric of mail in ballots are not safe and I disagree. I think mail in ballots are a very safe way to vote, certainly in Dade County, and you have to be careful when you say that because if you discourage people from doing that then obviously it can be a huge disadvantage. So we're starting to see an enormous advantage piling up right now in mail in ballots for a particular party and that's because the person who leads the other party has been talking about mail in ballots in a way that's not positive. So, I want to reassure people that mail in voting if that's the way you want to vote is going to be secure and safe. We're going to have at least two weeks of early voting so you can come in at any of several voting precincts, there are drop boxes where you can also drop your mail in ballot and of course election day. So I suspect close to 50 percent of the people that are going to vote in the election will have voted before Election Day this year.
WW: So we only have a couple more minutes and so I want to turn back to something really fun which is the Heat’s run in the NBA Finals. First of all, congratulations that they made the finals, second of all congratulations on being in the great state of Florida that hosted the Bubble and did so effectively in doing the Bubble. I guess my question Mr. Mayor is how do you get LeBron James to leave LA and come back to Miami?
MS: You know I think what we're going to do is go after Giannis, that's what I think we're going to do. Once you've left it's hard to come back, we certainly would take him back there's no doubt about it and he goes from villain to hero again, but it's hard when somebody leaves you, it's hard but someone at his talent level it would be great to have him back, but I think we're going to be as Pat Riley would say whale hunting for some big names over the next year or two. And I think this team really surprised people. It's a collection of people that nobody really paid attention to and to go from the fifth seed, to win the Eastern Conference in the way that they did because I don't think they lost two games in any series in the Eastern Conference, they won every series either by sweep or losing one game, and then to get to the finals and be completely overmatched, you know what I mean, by the Lakers and be able to fight hard and win a couple games there and push them as hard as they needed to be pushed. Let's put it this way, Mayor Garcetti and I had a lot of interesting text messages, comments between us about who was going to win the game.
WW: I can only imagine. So final thing, Mr. Mayor. These are very challenging times. We have a presidential election coming up in a couple weeks, we have a health crisis in America that does not have a clear end to it yet, we're waiting for a vaccine to come. We have social unrest and significant racial injustice in America today, and many people are sort of if you will in a very unsettled feeling, all you have to do is look out in the media and you can see everyone saying sort of we want to turn the page on 2020 and kind of get back to life as normal. You're such a fantastic leader. How do you, what are the issues right now that you're focused on that say, you know, yeah, there's a lot of uncertainty but this is the path forward. When people look to you to say everything's going to be okay what are you thinking about, what's the messaging that you're giving people right now?
MS: Well the messaging is that it is going to be okay and we know that it's going to be okay because we were doing great prior to this virus happening and sometimes even an adverse situation like what we've gone through is really a great moment of reflection and it allows us to understand our weaknesses. You know in life you can’t always, you're not always going to win, you're not always going to be ahead. Sometimes you when you take a situation like this that’s difficult you can learn a tremendous amount from it and I think we have learned, we've learned about our resiliency, we've learned our ability to change some of the things that we are accustomed to doing, we also have learned about our fragility and our vulnerabilities which is important because it teaches you how to be more resilient and how to be stronger and I think we're going to come out of this stronger. I think one of the things from Miami's perspective is seeing a company like Blackstone choose Miami to locate, seeing that tech economic momentum and like you said having a diverse enough of an economy that we can have a shutdown tourist economy and yet still rank fifth in restoring jobs really talks about our entrepreneurial spirit, that's really what makes Miami special, that and our diversity. We're a city like I said earlier that many people come from different countries and they all feel comfortable and confident living here, they don't feel like strangers, they feel like this is home and I think because of that Miami has been a city that's been blessed in many ways and has some of those statistics that we talked about in terms of low crime, low taxes and beautiful weather as you can see behind me.
WW: Well Mr. Mayor it is a real treat to have you on. I'm greatly appreciative with everything going on in your world today that you took the time to share some of your thoughts and also to show your leadership because you are one of the great mayors in America. I'm deeply thankful to you for taking the time. Fantastic to see you and to everybody who joined us today, thanks for taking the time and we'll see you again next week.
MS: Thank you Willy I appreciate it.