Florida Bulldog: Miami-Dade Commissioner questions value of $3.7 million Beacon Council subsidy

Original link here: http://www.floridabulldog.org/2016/10/miami-dade-commissioner-questions-value-of-3-7-million-beacon-council-subsidy/

An elected official’s recent inquiry into The Beacon Council, a private agency that is tasked with keeping companies in Miami-Dade and attracting new ones, revealed that 10 firms that supposedly received assistance in the past year have either zero presence or no employees based locally.

County Commissioner Xavier Suarez said his investigation raises doubt about whether Miami-Dade should continue subsidizing The Beacon Council, which it does to the tune of $3.7 million a year.

“My instinct tells me we could use that money more effectively for micro-loans and insurance subsidies for small businesses,” Suarez told Florida Bulldog. “Just about anything else but giving money to The Beacon Council bureaucracy makes more sense.”

Dyan Brasington, The Beacon Council’s executive vice president of economic development, defended the agency’s performance in an email statement that claimed the agency facilitated the creation and retention of 2,840 jobs in the past fiscal year.

“These jobs contribute an estimated $50 million to the local economy and help families thrive and prosper while generating additional indirect jobs,” Brasington said. “The companies that have expanded or located to Miami-Dade will spend $188.2 million in new capital investment and occupy over 1 million square feet of commercial space.”

Suarez colleague Daniella Levine Cava, a Beacon Council board member, also defended the agency’s track record. “I think the Beacon Council has done a good job in the narrow aspect of economic development,” the county commissioner from South Dade said. “What they have done has not been effectively communicated to the public.”

However, Suarez’s probe turned up some troubling evidence when members of his staff attempted to verify The Beacon Council’s assertions in its Third Quarter Key Performance Indicators Report. During the first week in August, Suarez’s staffers conducted on-site visits to the addresses of the 10 firms that were provided to The Beacon Council, according to an Aug. 22 memo the county commissioner sent the agency’s then-CEO Larry K. Williams.

For instance, on Aug. 10, Suarez aide Joanne Padron visited The Doral Professional Center at 7950 NW 53rd St., where Alpha Trade, a construction materials import and export business that received Beacon Council assistance, supposedly had an office suite. Instead, Padron found Offix Solutions, a shared-office space for multiple companies with a single receptionist, who informed her that no one from Alpha Trade was available to meet with her.

Padron was also unable to find any state incorporation records for Alpha Trade or its phone number. On Oct. 21, during a visit to Offix Solutions, the receptionist told a Florida Bulldog reporter that there was no Alpha Trade located in their shared office space and that the company’s CEO, Sergio Santa Ana, was not listed in their directory. “I’ve got an Alpha International,” she said. “But there’s no one with the name Sergio Santa Ana. Maybe they went out of business.”

Santa Ana did not respond to a request for comment sent to an email address listed on Alpha Trade’s Facebook page, which lists the Offix Solutions location as the company’s location.

Another Suarez aide, Ela Pestano, stopped by 2330 Ponce de Leon Boulevard in Coral Gables on Aug. 12 to verify the existence of GeoGlobal USA, a start-up company that is going to import and sell home goods and furniture in the United States and Mexico, according to The Beacon Council’s third-quarter report. The agency claims it helped GeoGlobal by providing contacts, referrals, training and workforce recruitment assistance.

Pestano informed Suarez she found an accounting firm, Hernandez & Co., at 2330 Ponce de Leon Boulevard, but no GeoGlobal. She also visited another address in Doral that GeoGlobal listed in its state incorporation records that turned out to be the headquarters for A Customs Brokerage, a shipping and logistic company. Padron told her boss that individuals at Hernandez & Co. and A Customs Brokerage had never heard of GeoGlobal.

Florida Bulldog visited Hernandez & Co. and A Customs Brokerage the same day as Offix Solutions. A woman at the accounting firm said GeoGlobal was her client and uses 2330 Ponce de Leon Boulevard as a mailing address. She declined to provide Florida Bulldog with a contact person for GeoGlobal. At A Customs, a company representative also said GeoGlobal was a client that used their address, but was not physically located there.

Suarez’s aides turned up similar results for the eight other firms identified in The Beacon Council’s third-quarter report.

According to a Sept. 2 memo from Williams to Suarez, The Beacon Council’s then-CEO informed the commissioner that it was not unusual for new companies like Alpha Trade and GeoGlobal to have temporary office space before establishing a permanent address. “Given the nature of decision making for corporate relocations and expansions, the outcome of your staff’s outreach does not surprise me,” Williams said. “The person knowledgeable about the transaction is not the person at the reception desk and is sometimes in a different office.”

In his response to Florida Bulldog, Brasington said CEOs and executives whose companies receive Beacon Council assistance must attest in writing to the work the agency provides their businesses. “Company leaders often do not share information about location or expansion decisions with employees or even middle management, which is why some employees may not be aware of the assistance provided by The Beacon Council,” Brasington explained. “The economic development process of educating and then recruiting or retaining businesses can be lengthy.”

However, the same week Williams sent Suarez the letter, he resigned as Beacon Council CEO to assume the same role for Atlanta’s Technology Association of Georgia, where he was previously a vice president. The commissioner’s inquest occurred just as The Beacon Council — which relies on $3.7 million in county permitting fees for its $5.2 million annual budget — became an issue in the county mayor’s race. Miami-Dade School Board member Raquel Regalado, who is in a runoff with County Mayor Carlos Gimenez, has made eliminating The Beacon Council one of her campaign promises.

Suarez told Florida Bulldog he held a public meeting earlier this month with Levine Cava and Beacon Council chairman and Greenberg Traurig co-managing shareholder Jaret Davis to discuss his findings. “I stated my views that a lot of people in the business community don’t see the sense in giving $3.7 million to The Beacon Council for promoting economic development,” Suarez said. “I am leaving it in the hands of my colleague, who expressed some of the same concerns I have.”

Levine Cava told Florida Bulldog that The Beacon Council does have room for improvement, but doesn’t believe it should be cut off from county funding. “I found The Beacon Council’s response to Suarez to be credible,” she said. “In each case, there was a logical explanation for what his staff found. There is nothing that cries out a problem exists.”