GSR: How will the ICSC Florida conference be different this year than in the past?

Rivera: I think that the panels this year are fantastically in tune with what's going on now in the industry. I think it's going to be a very valuable conference for people to be at.

GSR: What do you think the main objective will be for most of the attendees there?

Rivera: I think it depends on the attendee. The person that's been in the industry for a long time is there primarily for networking opportunities and to gather market research. Whereas the attendee who is maybe a freshman in the industry is really there to learn about the industry and through the panels and sessions how the industry works and what they need to do to develop in it.

GSR: Do you think more people go to make deals or take part in the educational sessions?

Rivera: I think it's pretty balanced. The statistics have shown that as the conference has developed over the years and as the programs have become very valuable and timely, that you get an even split of people that go to the sessions and those who register later on Monday and go for the Tuesday deal making. A lot of people go for the meat of the program as well.

GSR: One of the sessions focuses on growth management. How big of an issue is that for retail developers?

Rivera: Growth management has been a major issue in the development industry since 1985. Florida was one of the first states to adopt growth-management legislation. We've been working within the parameters of that law since then. It has been tweaked back and forth over the years through regulation by the Department of Community Affairs or the Legislature, which has passed glitch bills to correct things that were developing improperly.

But the major issue is with the hometown democracy amendment proposed to the Florida constitution. Florida has the easiest constitution to amend; it's been amended 103 times, for mostly insignificant and stupid reasons. But there is a proposed constitutional amendment that says cities and counties can no longer amend their comprehensive plan without having a public election. If that passes, it will be the end of the real estate development industry in Florida as we know it. It will cripple banking and real estate development. If you have to change something in that master plan to develop a piece of property, whether it's a single-family home, a four-unit apartment building or a one-million-sf shopping center, it doesn't matter. Those plans a tweaked all of the time. But if the only way you can do that is not by going to a public hearing and getting the county to amend it, if you have to wait for the next election to do that, or you have to fund your own public election, you'll never be able to build anything in Florida again. It's a pretty scary amendment.

GSR: What is behind this?

Rivera: It's just opposition to development. It's a group of people who just don't want development in Florida.

GSR: Have many municipalities rallied against Wal-Mart or other big-box retailers building in their area?

Rivera: There aren't too many municipalities that have anti-big-box ordinances on the books. It's done piecemeal, on a project-by-project basis, when you go in for a project, whether it gets approved or not.

GSR: Are mixed-use projects as being pushed for by municipalities in the state, as they are in other states?

Rivera: I think municipalities are behind it, and I think some of the lending community is behind it as well. It's a way to sort of diversify the risk factor in a project. It's as win-win proposition for everybody. Lenders like it, developers like it, cities like it, and that's why it's gained so much in popularity.

GSR: How have hurricanes recently impacted how retail developers are doing their business, if at all?

Rivera: It's not new at all. The building codes are the building codes. They've been there for quite some time for preventing that kind of thing. What has changed somewhat over the past couple of years has been the cognizance of the inability to have public utilities. I think that has come to light more so, and I think you are leaning more toward the view that it is important to have portable generators at major facilities. That was seen by Publix, which made the commitment to put generators in a number of their stores and is doing that. The Legislature passed the generator law for multiple gasoline service stations. I think there is more awareness of the fact that the building may withstand a hurricane, but that doesn't really help you if you don't have the ability to operate the building. There is more awareness of the fact that the construction That doesn't really help you if you don't have the ability to operate the building. The eight or nine storms we've have over the last couple of years has sort of hit home on that issue, and you are seeing a lot more being done to bring portable in place.

GSR: Other than what we've discussed, what is the biggest challenge that retail developers are facing in the state?

Rivera: The single biggest problem facing Florida's commercial real estate today is commercial insurance, the ability to obtain it, and if you are able to obtain it, the exorbitant cost of it. ICSC has established a national task force that is working on that issue on both the state level and the federal level to deal with catastrophic insurance issues and the availability and the affordability of that insurance. Companies are simply not renewing people. They are refusing to issue builder's-risk insurance, so it is becoming difficult to build anything. If you don't get builder's risk, the lender won't fund. The cost of whatever to obtain and the high deductibles are also high. The cost of insurance has gone from 30 cents a foot to $3 to $5 a foot, if you can obtain it. And a lot of people aren't even able to obtain it.

Instant Insights /

ICSC Florida Committee Member Oscar Rivera

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