1667-10 Fisher Island 116
MON DEC 09 1991 ED: FINAL
SECTION: BUSINESS PAGE: 4BM LENGTH: 24 . 71" MEDIUM
ILLUST:
SOURCE: LARRY BIRGER Business Monday Editor
DATELINE:
MEMO:
NEW BANKING LAWS COULD HURT LOCAL ECONOMY
AS if the demise of Pan American World Airways wasn' t enough bad news
for one week, now comes word that recently passed federal legislation
affecting international banks could play havoc with Miami' s economy.
Overlooked while most attention was focused on the bailout of the
Federal Deposit Insurance Corp. , the legislation places added restrictions on
establishment of offshore agencies of foreign banks that are financing much of
the trade between Miami and Latin America. Among them:
* Home country bank supervisory authorities are being required to assume
responsibility for overseeing operations of the foreign banking agencies.
* New agency applications must be submitted not only to state
authorities but to the Federal Reserve, which also has the power to revoke
licenses of agencies that don't meet more stringent regulations yet to be
drawn.
The new legislation, prompted by the BCCI scandal, could be harmful in
two ways: New applications could dry up, and some existing agencies could be
forced to close, especially those whose parent banks are located in smaller
Latin and Caribbean nations that can't guarantee or afford adequate oversight.
Bowman Brown, an international law specialist, notes: "If the Fed
doesn' t exercise its newly conferred powers in a way that carefully balances
commercial interests here and bank supervisory considerations, it could hurt
Miami ' s development as an international banking center. "
Adds another international lawyer, Raul Valdes-Fauli: "The Fed could
slam-dunk us if it decides to limit licensing based on size. That will keep
the big agencies here, such as Barclays and Deutsch-Suedamerikanische, but
eliminate the little guys desperately needed to finance trade in the smaller,
less wealthy countries. "
With downtown Miami office space already going begging, thanks to the
demise of Southeast Bank and CenTrust, the situation grew even more desperate
last week.
First Union Corp. has reached agreement with managers of the Southeast
Financial Center to gradually vacate all of the space that Southeast Bank had
occupied, 577 , 000 square feet.
Somewhat softening the blow, spokesman George Owen says it ' s possible
that First Union might renegotiate with the center' s manager, Hines Investment
Limited Partners, to retain some space in Miami ' s tallest skyscraper.
First Union also plans to shrink its branch network in Dade from 60 to
37 during 1992, trimming the amount of space it will need even more. In
Broward, the number of branches will fall from 44 to 39; in Palm Beach, from
63 to 48 .
With all that space suddenly tossed on the market in a lousy economy,
it ' s reported Hines is offering leasing rates to prospective tenants that are
less than $20 a square foot, or about what it takes to meet debt service. In
addition, Hines would pick up the cost of electricity, taxes, maintenance and
other incidentals . A Hines spokesperson declined to comment.
But rates that low are also dealing a blow to prospects for nearby
office towers. Owners of at least one are expected to hand back the keys to
the lender because it was bought on the basis of $30-a-foot debt service.
While downtown Miami ' s commercial real estate picture is bleak, business
is hopping on nearby Fisher Island, home to some of the rich and famous.
James Baumann, developer-managing director, reports that October was a
banner month, with strong sales to European and Brazilian buyers. Nine
condominiums were sold for a total of $14 . 8 million, including one 8,400-
square-foot beauty that went for $4 , 425, 000, fully furnished.
Baumann also says no problems have developed with New Jersey regulators
who took over Mutual Benefit Life Insurance Co. earlier in the year when
Fisher Island' s financial angel ran into trouble over its high level of junk-
bond assets.
"We ' re even getting mortgage financing for new clients through Mutual
Benefit, " Baumann adds.
It will never replace Pan Am, but another U.S. airline may be in Miami' s
future. Kind of.
Arthur Lewis, former Eastern Airlines president, heads a group that has
applied to the Department of Transportation to operate an airline -- US Africa
Airways -- that would fly between South Africa and four U.S. cities including
New York, Washington, Atlanta and Miami.
Look for the first book relating the "inside story" on the demise of
Eastern Airlines to be published in March, by Harper Collins.
Freefall, written by Jack E. Robinson, former president of subsidiary
Eastern Express, purports to be an insider' s perspective on how the carrier
got into trouble and the egos and power plays at work in the carrier' s
downfall.
"Charlie Bryan (who headed District 100 of the International Association
of Machinists) , the unions and investment bankers don' t come out looking too
good, " Robinson says. "Frank Lorenzo (Texas Air chairman who acquired the
airline) shows up good and bad. "
When Studebaker' s nightclub in Kendall Town & Country Mall suddenly
closed, it left 26 employees without work. But Mike Neiman, president of
nearby Charcoals, didn' t leave it that way.
Neiman offered each person a job -- and 17 have taken him up on the
offer. Says Neiman: "It ' s bad enough dealing with day- to-day living, let
alone being unemployed for the holidays . We just made our family a little
bigger this Christmas. "
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