Holiday travel appeared slow at local airports, but brighter predictions for
the rest of the tourist season keep industry officials hopeful.
Though final figures aren’t available yet, Palm Beach International Airport
reported there were 8.4 percent fewer parking transactions in December
compared to the prior year.
“I expect passenger traffic will fall similarly,” said Mike Simmons, deputy
director of finance at PBIA.
The loss of passengers is largely tied to the loss of flights, he added,
noting that total passenger numbers fell by about 12 percent in November
compared to November 2007, as airlines cut back about 13 percent on flights.
It’s similar at Fort Lauderdale-Hollywood International Airport, where
spokesman Steve Belleme estimated that the airport’s passenger count
declined about 11 percent, year-over-year. He said those drops are tied to
“The bottom line is you can only have as many travelers as you have seats.
The silver lining is the discount carriers are picking up as the majors are
cutting back,” Belleme noted, pointing to big increases in 2008 from market
leaders Spirit Airlines, JetBlue Airways and Southwest Airlines.
Belleme predicted the Broward County airport will see 13.3 percent fewer
passengers from the beginning of January though the end of May compared to
the same time last year.
Miami International Airport isn’t making long-term projections, but
spokesman Marc Henderson predicted passengers will essentially be flat – up
just 0.01 percent for Dec. 21 through Jan. 7.
MIA’s parking dropped 14.8 percent in December. Henderson said that may be
due to factors – such as more people getting dropped off instead of driving
themselves – that wouldn’t necessarily correlate to a drop in passengers.
The airport remains strong in international traffic, which is profitable for
airlines, he added, and MIA is one of the few that has had a net gain of
From Nov. 23 to Nov. 30 – Thanksgiving week – passenger numbers increased
3.2 percent. The prediction had been a drop of 1 percent, Henderson noted.
“We probably are doing better than a lot [of other airports] and, yes, there
is strength in the Latin American market and other places," he said.
South Florida’s airports continue to draw strength from the cruise ship
industry. From January through the end of November 2008, the Port of Miami
reported a 10.5 percent jump in cruise passengers compared to the same
period in 2007. In November alone, the port reported a 16.4 percent increase
in passengers compared to November 2007. For the current winter season, port
officials are projecting a 4.7 percent increase in cruise ships making calls
at the port.
At Port Everglades, total passengers declined by 5.3 percent when comparing
January through September 2008 to the same period in 2007, but that was
mostly due to a loss of daily passengers from SeaEscape gambling cruises,
port spokeswoman Ellen Kennedy said. (SeaEscape ceased operations at the
port last summer after suffering from onshore gambling competition.)
Multiday cruise passengers, who comprise the port’s greatest share of
passengers, declined 2 percent. Kennedy said the port expects total
passengers would be down 4.7 percent for the 2009 fiscal year, which ends in
September, but passenger traffic should grow in 2010 and 2011, when large
cruisers will arrive and bolster capacity.
The Port of Palm Beach lost 19 percent of its mostly day-cruise passengers.
This was due to the economy and financial issues with the port’s largest
cruise operator, the Palm Beach Princess, which caused it to slash
advertising budgets, port spokeswoman Jarra Kaczwara said. But, since the
bankrupt company was been sold to a new owner, Kaczwara expected the port’s
total passengers would increase by 6 percent to 10 percent in 2009. MORE
Conversions dominated South Florida foreclosure activity in 2008 among condo
and townhomes, with a West Palm Beach project’s $30 million in bad loans
leading the way.
Condo conversion Ponte Verde at Palm Beach Lakes had 162 units go into
foreclosure last year, which ranked it as top for foreclosures, according to
Bal Harbour-based Condo Vultures LLC, whose data tracks initial foreclosure
filings in 2008.
Miguel Poyastro-led Grec Conversions of Miami converted the 465-unit Ponte
Verde. He could not be reached for comment
Although Miami-Dade County was the focus of development in the tri-county
area during the real estate boom, Broward and Palm Beach counties held the
top five projects for foreclosures, with combined bad debt of $134 million,
according to Condo Vultures research.
Condo Vultures CEO Peter Zalewski said Broward and Palm Beach’s ascendancy
means Miami-Dade got through its defaults early. Broward and Palm Beach also
had a lot more condo conversions, which had lower deposits and lots of
speculation, he said.
Robert Given, CB Richard Ellis executive VP in the South Florida
Multi-Housing Group, said developers went after condo conversions in
Miami-Dade first because the county had properties with the greatest sale
upside. They moved northward to Broward and Palm Beach, then to Florida’s
west coast and Orlando, all of which were saturated with condo conversions.
The other South Florida projects with the greatest foreclosures are
Edgewater in Coral Springs, with 125 units in foreclosure; Palm-Aire Country
Club in Pompano Beach, with 123 units; Tides on Hollywood Beach in
Hollywood, with 119 units; and Palm Hill in West Palm Beach, with 105 units.
Shoma Homes’ Townhomes at Keys Cove, which had 97 units owing more than $15
million in mortgages, was the highest ranked Miami-Dade project.
The Condo Vultures rankings were based on total condo units and townhomes in
foreclosure, not the total amount owed. The project with the most owed was
the Tides on Hollywood Beach, with $41 million in bad loans, data showed.
Boca Raton-based First Southern Bank became first South Florida-based bank
to receive preliminary approval to raise funds under the U.S. Department of
the Treasury’s Capital Purchase Program.
The private community bank, which focuses on commercial real estate loans,
said Jan. 6 that it could sell $10.9 million in preferred stock to the
government. If the bank participates, it would have five years to repay that
amount, plus 5 percent annual interest. After five years, the interest rate
would be 9 percent.
A $10.9 million infusion from the government program would boost First
Southern’s $42.9 million in equity capital as of Sept. 30 by 25.4 percent.
First Southern Bank President and CEO Franklin G. Burnside said bank
officials would meet and discuss how it could boost lending should it decide
to accept the money. That would probably including hiring more lending
officers and making more commercial real estate loans, he said.
“The market has already come down to the point that we might consider that
it’s probably a pretty good time to lend,” Burnside said. “I’d imagine that
it’s safer to lend now than it was three years ago.”
Founded in 1987, First Southern has five offices. Its financial position
appeared strong in the third quarter.
According to Federal Deposit Insurance Corp. data, First Southern had net
income of $855,000 in the first nine months of 2008, with $563,000 of that
coming in the third quarter. Only 0.86 percent of its loans were noncurrent
– a far better ratio than at most South Florida banks. MORE
First reported on SouthFloridaBusinessJournal.com