Wragg&Casas|StrategicCommunications

March16,2018

RoundtableSeries:SouthFloridaCEOsreadytoembraceinnovationinuncertaineconomictimes

By:BrianBandell

EventhemostsuccessfulCEOsarereluctanttopredictwheretheeconomyisheadingoverthelongterm,butit’sclearthatdisruptivetechnologieswillcontinuetothrowcurveballsatcompanies.

FromUberandAirbnbtoe-commerceandbitcoin,innovativeproductscanthreatentraditionalbusinessandcreatenewmoney-makingopportunities.Companyleadersmustbalanceinvestingincutting-edgetechnologywiththehealthofthecorporatebalancesheet,understandingthatarecessioncanoccurwhenleastexpected.

Intheend,itcomesdowntoleadership.IfaCEOcanstronglymotivateemployeesandbuildateamthatdevelopsnewideas,thecompanystandsabetterchancetoendurebothgoodandbadtimes.

Thesewerethemainissuesdiscussedby11SouthFloridaCEOsattheBusinessJournal’sCEORoundtableonMarch2.SponsoredbyComcastBusiness,thepanelwasmoderatedbyEditor-in-ChiefMelMeléndezattheSFBJ’sMiamioffice.ItispartoftheBusinessJournal’songoingRoundtableSeries,whereCEOs,CFOsandHRdirectorsshedlightonsalienttopicsofinteresttoourreaders.

2Roundtable Series: South Florida CEOs ready to embrace innovation in uncertain economic times

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CEORoundtable031618MeetthePanel

TonyL.Argiz

ChairmanandCEO,MBAF

1450BrickellAve.,18thfloor,Miami33131

(305)373-5500

targiz@mbafcpa.com

IssaAsad

CEO,QLinkWirelessLLC/QuadrantHoldings

499E.SheridanSt.,Suite400,DaniaBeach33004

(954)482-4255

issa@quadrantholdings.com

TonyCho

PresidentandCEO,Metro1

120N.E.27thSt.,Suite200,Miami33137

(305)909-6775

tcho@metro1.com

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March16,2018

AdrianEsquivel

Chiefexpert,TECKpert

2100CoralWay,PH701,Miami33145

(786)393-5826

aesquivel@teckpert.com

IgnacioGarcia-Menocal

CEO,GroveBayHospitality

2640S.BayshoreDive,Suite302,Miami33133

(786)866-9854

Ignacio@grovebaygroup.com

CalixtoGarcia-Velez

ExecutiveVP,FirstBankFlorida

701WaterfordWay,Suite800,Miami33126

(305)280-0060

calixto.garcia-velez@firstbankfla.com

MarkJ.Gemignani

CEO,DominionAG

President,DominionBuilders

4942LeJeuneRoad,Suite203,CoralGables33146

(305)661-2700

mgemignani@dominion-ag.com

WendyKallergis

PresidentandCEO,GreaterMiamiandtheBeachesHotelAssociation

1674MeridianAve.,Suite420,MiamiBeach33139

4Roundtable Series: South Florida CEOs ready to embrace innovation in uncertain economic times

Wragg&Casas|StrategicCommunications

(305)531-3553

wkallergis@gmbha.com

AlanB.Levan

ChairmanandCEO,BBXCapitalCorp.

Chairman,BluegreenCorp.

401E.LasOlasBlvd.,FortLauderdale33301

(954)940-4000

alevan@bbxcapital.com

DevMotwani

PresidentandCEO,MerrimacVentures

2434E.LasOlasBlvd.,FortLauderdale33301

(954)522-6556

dev@merrimacventures.com

JimmyTate

President,TateCapital

1175N.E.125thSt.,Suite102,NorthMiami33161

(305)891-1107

jimmy@tatecapital.com

Companyleadersprepareforshiftsintheeconomy

TheGreatRecessionwasofficiallydeclaredoverin2009,buttheeconomicdevastationlingeredlongenoughtokeepitfreshinthemindsofmanySouthFloridaCEOs.

Thetri-countyregion,likemuchoftheU.S.,hasexperiencedprosperityforaboutfiveyears.Withconsistentjobgrowth,risingrealestatepricesandhighersalesformanycompanies,there’salottocelebrate.

ButwhilelocalCEOsremainoptimisticabouttheeconomy’soutlook,theyrememberthatdownturnscancomeswiftly–andwhenthey’releastexpected.

TonyL.Argiz,chairmanandCEOofMiami-basedaccountingfirmMBAF,saidfederaltaxcutsshouldboosteconomicgrowthinSouthFloridathisyearandin2019.Still,theunemploymentrateissolow

Wragg&Casas|StrategicCommunications

March16,2018

thatit’sbeendifficulttofindemployees.Companiesmustofferhigherwagesandbenefitstoretaintalentinthiscompetitiveenvironment,hesaid.

ThefederaltaxcutsallowedDaniaBeach-basedQLinkWirelessLLCtohire80peopleinthepastthreemonths,saidIssaAsad,CEOofthewirelessserviceprovider.Thehardestpositionstofillaretechnologyworkers,headded.

Whilealloftheeconomicindicatorsappearstrong,realestatedeveloperJimmyTate,presidentofMiami-basedTateCapital,saidhehasanuneasy“gut”feelingthatsomethingisn’tright.So,he’skeepinghiscompanylean,justincase.

“Youhavetobesmartanddecreaseinventoryandincreasecapitalreserves,”Tatesaid.“2008taughtusitcanhappenquicklyandalotofexternalforcescancomeintoplay.Youneedlotsofcashtoprotectyourself.”

ThatextralevelofcashcertainlyhelpedGroveBayHospitalityoverthepasttwoyears.Thecompany,whichownsrestaurantsincludingAmericanHarvest,StiltsvilleandGlass&Vine,sawalossofdinersduetotheZikavirusscareandHurricaneIrma,butitstillpaidemployeesbecauseitwasfinanciallyprepared,saidIgnacioGarcia-Menocal,CEOoftheMiami-basedcompany.

BBXCapitalCorp.(NYSE:BBX)ChairmanandCEOAlanB.LevanguidedhiscompanythroughtheGreatRecession,althoughthatrequiredsellingoffBankAtlanticandsomeotherbusinesses.NowtheFortLauderdale-basedcompanyisonagrowthspurt,acquiringavarietyofbusinesses,fromchocolatestopizzatorealestatedevelopment.

Levaniswellawarethatanotherdownturncouldcomeatanytime.

“Wesurvivedthelastrecession,butwedidn’thavealotofextracasharoundtotakeadvantageofopportunities,”Levansaid.“Thistime,weexpecttosurviveitandbewell-stockedwithreservestotakeadvantageoftheopportunities.”

There’salreadybeenaslowdownincommercialrealestatedeals,asmanysellershaveunrealisticexpectationsonpricing,saidTonyCho,CEOofMiami-basedbrokerageanddeveloperMetro1.AfterarapidincreaseinpricesinMiami’surbancoreinrecentyears,sellersexpectthatvalueswillcontinuegrowingatsimilarlevels.Theproblemisthatlendershavebeenmoreconservativeinfinancingdeals,sotherehavebeenstandstillsinmanynegotiations,hesaid.

“Ifthe[FederalReserve]raisesrates,thatwillhaveadramaticimpact,”Chosaid.“Theyaresoaddictedtothislow-rateenvironment,whichisnotsustainable.”

Politicscanalsomakewavesintheeconomy,especiallywhenitimpactstheinternationalcommercethatSouthFloridadependson.

DevMotwani,presidentandCEOofFortLauderdale-basedrealestatedeveloperMerrimacVentures,saidforeignbuyershavebeenahugesourceofcondopurchasesthroughoutSouthFlorida.Recently,onehigh-endforeignbuyerexpressedconcernthatachangeinU.S.immigrationlawswouldmakeitdifficultforhimtobringhisfamilywithhimtotheU.S.

“Peopleareturnedoffbytherhetoricandnotfeelingwelcome,”Motwanisaid.

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Inthebankingworld,internationaldepositorsfeeltheirmoneyisn’twelcomeintheUnitedStatesbecausethefinancialregulationsaresoburdensome,saidCalixtoGarcia-Velez,executiveVPofFirstBankFlorida,theMiami-baseddivisionofFirstBankPuertoRico(NYSE:FBP).Internationaldepositscanbeusedtomakeloanslocally,soreducingthisimportantsourceofcashslowsthegrowthofbanks,headded.

Ifacompanycouldbeadverselyimpactedbypoliticsorregulations,it’simportantthatexecutivesspeakup,someoftheCEOssaid,addingthattheimmigrationrhetoriccouldadverselyimpacttourismandotherbigindustriesinSouthFlorida.

WithabouthalfofMiami-DadeCountyvisitorscomingfrominternationalmarketsandmanyofthelocalhospitalityworkersbeingimmigrants,WendyKallergis,presidentandCEOoftheGreaterMiamiandtheBeachesHotelAssociation,saidithasbeenpassionatelysupportingallowing“dreamer”immigrantsandthosewithtemporaryprotectedstatustostay,astheyareanimportantpartofthehospitalityworkforce.

CEOsdon’tfeardisruption,theyadapt

Ifanew,disruptivetechnologyisemerging,theworstthingforaCEOtodowouldbeignoreit–especiallyifitdirectlyimpactstheirbusiness.

Traditionalindustriesoftentrytothrowuproadblocksthatstopinnovativecompetitorsintheirtracks,butthatrarelyworksifthepublicembracesthenewtechnology.Thinkofthelegalandpoliticalmethodsusedagainstdigital/streamingmusic,ride-sharingandhome-sharing.Nomatterwhatjudgesorpoliticianssaid,itwasnearlyimpossibletoblockdigitalcommerce.

Evenifadisruptivetechnologydoesn’tcompetewithanindustrydirectly,itcouldhavemajorramificationsforit.Forinstance,manyrealestatedevelopersarechanginghowtheydesignprojectsinresponsetoride-sharingandtheanticipationofdriverlesscars.

“Theword‘disruption’shouldscareusalltodeath,”saidAlanB.Levan,chairmanandCEOofFortLauderdale-basedBBXCapitalCorp.(NYSE:BBX)andchairmanofBluegreenCorp.(NYSE:BXG).“Uberdisruptedtaxis.Airbnbismakingprogressagainsttraditionalhospitality.AmazonistotallydisruptingWalmart,andWalmartisthelargestcompanyintheworld.”

Insomecases,jumpingintoinnovativetechnologyearlycangiveacompanyahugeadvantage.

MarkJ.Gemignani,presidentofDominionBuilders,startedDominionAGtoserveasageneralcontractorforindoorgrowhousesthatwereproliferatingaroundthenationformedicalmarijuanaproduction.He’skeepingacloseeyeonnewbuildingtechnologies,suchas3-Dprintingofentirestructures,becausetheymightbringdowncosts.

Startingoutasadisruptorisn’teasy.

QLinkWirelessprovidesfreesmartphonesandlow-costwirelessservicetopeoplewhoqualifyforfederalassistance.Whenthecompanylaunchedin2011,ittookalongtimetopersuadetheFCCtoapproveitsbusinessplan,anditcouldn’tsecureventurecapitalfinancing,CEOIssaAsadsaid.Theprincipalsinvestedtheirmoney.Nowthey’repullinginabout$200millioninrevenueayear,withnocreditlines,hesaid.

“Millennialsarenotlookingforthestatusquoorthedinosaurwayofdoingbusiness,”Asadsaid.“Youmustretoolyourbusiness.It’saboutlookingforwardandnotbeingantiquated.”

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March16,2018

SouthFlorida’spositionasagatewaytointernationalbusinessmakesinnovationintechnologyevenmoreimportant.

AdrianEsquivel,chiefexpertofMiami-basedconsulting,softwaredevelopmentandonlinesupportfirmTECKpert,saidmanySouthAmericancompaniesarefastertoembracedisruptivetechnologies,suchasblockchainanddigitalcurrencies.HeoftendrawsonideashefindsoverseasandappliesthemtotheU.S.

TECKpertregularlycarvesoutawholedayandallowsateamofemployeestodevelopanewconceptorpieceoftechnology.Evenifthatproductisn’tusable,attheendoftheday,itfostersinspirationandcreatesanopportunitytolearnsomethingnew,hesaid.

LevansaidmanyofthebestideasatBBXcomefromitsyoungestemployees.It’simportantthatseniorexecutiveslistentomillennialsandnotdrownouttheirvoices,headded.

“Ihiremillennialsandkeepthemaroundallthetimeandrunideasbythem,”saidDevMotwani,presidentandCEOofFortLauderdale-baseddeveloperMerrimacVentures.“Thepaceofchangeisthepaceoftheirlife.”

Trueleadershipcan’tbebought,topexecutivessay

WhenTonyChofoundedhisrealestatebrokerageatage26,hethoughttheemployeeswouldloyallyfollowhisdirectionsbecausehepaidthem.Butthatwasn’tthecase–atall.

Noonewilllistentoyousimplybecauseyousigntheirpaycheck,saidCho,presidentandCEOofMiami-basedMetro1.Youmustearntheirrespect.

IfemployeesfollowyousimplybecauseyouhavetheCEOtitle,thenthey’lldothebareminimumtogetby,saidIgnacioGarcia-Menocal,CEOofMiami-basedrestaurantgroupGroveBayHospitality.Peoplewillworkmuchharderforleaderswhodisplayshonestyandintegrity,andshowtheyhavethebestinterestsofemployeesinmind,hesaid.

TheCEOsstressedthatrecognizingemployeesforgoodwork,whetherwithbonusesorawards,helpsimprovemorale.Thebossshouldencourageemployeesofalllevelstospeaktheirminds,sovisittheirdesksoftenandconsiderchangingtheworkplacetoan“openoffice”format,theCEOssaid.Mostimportant:Don’tplaceyourselfinanivorytowerwhereyoucan’tbereached.

AccordingtoasurveyofworkersbyKollective,62percentexpectface-to-facecommunicationwiththeCEO.Justunderhalfofthosesurveyedweresatisfiedwiththelevelofcommunicationfromtheexecutiveteam.

JimmyTate,CEOofNorthMiami-basedTateCapital,saidoneofthefirstthingshedidafterbuyingtheBahiaMarFortLauderdaleBeachhotelwasspeakwiththeemployees–everyonefromthehousekeeperstothedishwashers–abouthowtoimproveservice.

“Thebigthingishumility,”saidTonyL.Argiz,chairmanandCEOofaccountingfirmMBAF.“Whateveryoudoinlife,youhavetocareaboutpeopleandcareaboutthecommunity.Youarenevergoingtobebetterthanyourpeople.Theyaretheoneswhomakeupyourcompany.”

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Wragg&Casas|StrategicCommunications

It’salsoimportantthataCEOhastheproperperspective.Whenengagedinthedailygrind,itcanbedifficulttoseethebigpictureandunderstandhowthingscouldbedonebetter.

CalixtoGarcia-Velez,executiveVPofFirstBankFloridainMiami,saidhedoeshisbestthinkingwhileonvacation.

“Findthetimetodedicatetothinkingandhelptheteamthinkabouttwoorthreeyearsfromnow,”hesaid.

QUOTABLES

What’sthebestthingaboutbeingaleader?

•TonyArgiz,MBAF:Whenemployeesbuyahomeandeducatetheirkidsatgooduniversities,youknowyouhavebeensuccessful.

•IgnacioGarcia-Menocal,GroveBayHospitality:AserverwhowaswithusforsevenyearstoldmeMonday:“Isavedenoughmoneytobuymyownhouse.”Thisisaguywithahigh-schooleducation.Iwassuperproudofhim.

•WendyKallergis,GreaterMiamiandtheBeachesHotelAssociation:Igettotalktocolleaguesacrossthecountry.It’sexcitingbecauseitwillstrengthenourvoice,aswell.

What’sbeenthebiggestsurpriseofbeingaCEO?

•DevMotwani,MerrimacVentures:Howharditistofindgoodtalent.

•CalixtoGarcia-Velez,FirstBankFlorida:Therewardingnatureoftheimpactyouhaveonpeople’slives.

•MarkJ.Gemignani,DominionAG:Peoplearen’talwayswhattheyseemtobe.Ifyouhaveagutfeelingaboutavendororaclientoranemployee,yourgutfeelingisusuallyright.

WhatwastheworstadviceyoueverreceivedasaCEO?

•CalixtoGarcia-Velez:Itisverylonelyatthetop.Ifoundthatnottobetrueatall.

•AdrianEsquivel,TECKpert:In2010,don’tbuyBitcoin.

•DevMotwani:Thatasmallerorganizationwasagoodwaytooperateanditkeptmefromhiringkeypositions.It’sthepeoplethatgrowanorganization.

•IssaAsad,QLinkWireless:Tooutsourcecertainstaffing.Ihatedhavingitremovedfromtheoffice.Inoutsourcing,yougetwhatyoupayfor.

Istheresomethingyouwishyouhaddonedifferently?

•AlanB.Levan,BBXCapitalCorp.:Iwoulddoittheexactsameway,includingtheconferencecallthatcostmea10-yearbattlewiththeSEC.

•IgnacioGarcia-Menocal:Hiringkeypositionsearlier.

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March16,2018

•CalixtoGarcia-Velez:Embracingtechnologyanddisruptiveinnovationsoonerinmyindustry.

https://www.bizjournals.com/southflorida/news/2018/03/15/ceo-roundtable-03-16-2018.html