Mayor Bill de Blasio (Kevin Case)
Miami’s business recruiters have a new bogeyman, and they couldn’t be happier.
“There’s one politician that’s helping us the most today, and that’s New York City Mayor Bill de Blasio,” said Carlos Deupi, general counsel of Miami-based private equity group Brilla Group LLC, giving the Knickerbocker a backhanded compliment during a discussion on how government was helping boost the financial industry in South Florida. “He’s taxing the heck out of hedge funds and sending them here.”
Miami City Commissioner Marc Sarnoff, agreeing with Deupi, took the comment a step further, relating how during a recent interview he was asked what factors were helping drive business to Florida.
“In order of magnitude, Maduro, Kirschner and de Blasio,” Sarnoff deadpanned, putting de Blasio in the same category as the leaders of Venezuela and Argentina who, many claim, have squeezed the business communities in those countries into exile.
“I should have probably mentioned de Blasio first,” he later corrected.
Deupi and Sarnoff’s comments came Wednesday during a breakfast panel of the Miami Finance Forum, a small-but-growing colloquium of Miami financiers, investors and finance-focused lawyers. Sarnoff, as chairman of the city’s Downtown Development Authority, has been spearheading a campaign to lure hedge funds to Miami.
He explained the idea behind the initiative is to attract more sophisticated financial players to add highly paid financial sector jobs, improve the city’s position as a global financial center and give greater Miami the cosmopolitan cachet of being “Wall Street South.”
Florida’s lack of income tax is a major selling point. In stark contrast to Florida’s red-state aversion to taxes, de Blasio is pushing his campaign promise of higher taxes on New Yorkers earning over $500,000. Being able to point at a figure like de Blasio with that contentious plan is still fresh in people’s mind has been “very effective” for the campaign, Sarnoff told the Daily Business Review.
“We’ve seen this movie before, and his name was [John] Lindsay,” Sarnoff said, referring to the New York City mayor starting in the late 1960s when the city was marked by labor strife, rising unemployment, racial tension and accelerating white flight. The hedge fund enclaves in “Connecticut didn’t exist in the way they do now before Lindsay. Miami will exist in a different way after de Blasio.”
The DDA’s marketing run recently scored a coup when a California fund led by a libertarian manager announced it was moving to the SBS building in Miami’s Coconut Grove. Coincidentally or not, that office is in sight of Sarnoff’s City Hall office.
“Florida’s business-friendly policies, which are so different from California’s, offer the perfect environment for us as we expand,” hedge fund Universa Investments LP founder Mark Spitznagel said in a statement announcing the move, perfectly echoing Sarnoff’s point. “I would expect to see more firms like Universa voting with their feet and relocating to a more hospitable business and tax environment, especially as many local governments are trying to tighten their grip on businesses.”
It hasn’t just been at cozy industry breakfasts that politicians and businessman have been sarcastically singing de Blasio’s praises.
At a recent real estate summit hosted by the Akerman law firm, Miami managing partner Neisen Kasdin measured his words when talking to his conference guest, New York City Planning Commission Chairman and de Blasio appointee Carl Weisbrod.
“The outside world views the election of Mayor de Blasio as a radical departure from Mayor Bloomberg,” Kasdin told Weisbrod. “Miami has always viewed itself as the sixth borough, so people in Miami half jokingly say this is great because this is going to lead to more New York residents moving to Miami.”
Business V. People
Weisbrod responded there’s “no question that Mayor de Blasio came into office with a very progressive agenda.”
But in a detailed response that highlighted the difference in economic development initiatives between the two cities, he suggested the main bone of contention might be the diametrically opposed paths the cities have taken to accommodate economic growth. He said Miami relies heavily on tax-increment financing to spur development, and New York doesn’t. Miami’s is based on wooing businesses that will bring jobs. New York wants to be a place where people want to live first and foremost, betting business will follow talent.
New York “has moved away from incentives to businesses as such and more toward investment in people and investments in the kind of infrastructure, particularly culture uses and open space and enhancements to quality of life, that are going to attract the talent that business needs,” Weisbrod said. “We believe business will go where talent is. If we can attract and retain talent, we can attract and retain business.”
In a way, Sarnoff has been dealing with the cultural side in the DDA’s bid to attract talent. Besides citing the obvious growth in city cultural institutions, the commissioner had to promise a hedge fund manager that his children would be guaranteed admission at one of Coconut Grove’s top private elementary schools.
Still, highlighting the way de Blasio and New York are different from Miami remains a key point in marketing the southern city.
“It’s pretty obvious they want to tax people there because they see an economic divide,” Sarnoff said. “In Miami, we see things differently.”