RE: SkyRise Miami

Dear Friends, Neighbors and Colleagues;

For the record, I do not object to the construction of an Observation Tower
within the City of Miami.
However, I do object to the proposed SkyRise Observation Tower and
possible future Casino, being constructed on Publicly Owned land.
If Mr. Berkowitz , the developer of SkyRise, planned to construct this
project on privately owed land I would not be writing you.

As it is the intent of Mr. Berkowitz to construct this project on property
owned by the City of Miami citizenry, I believe we have the right to pose
reasonable and fair questions about this proposal.
As such, I have spent some time looking over Mr. Berkowitzs SkyRise
Pro Forma Spreadsheet. Doing so has given me some serious concerns
about its viability.
(For those interested I have attached the SkyRise Pro Forma to the end
of this letter.)
NUMBER OF VISITORS
Mr. Berkowitz has declared that SkyRise will attract 3,200,000. visitors
per year. That number breaks down to 8,767 visitors per day to SkyRise.
This number was the first thing that caught my eye regarding this project.
8,767 Visitors Per Day seemed to me to be somewhat optimistic given the
size of our resident population and the number of visitors to Miami and the
Beaches.
According to the Visitor and Convention Bureau , 14,200,000 people visited
Miami and The Beaches last year.
The 2013 Census puts the Population of Miami-Dade County at 2,617,176.
The Combined Total of Residents and Visitors to Dade County, Miami
and the Beaches = 16,817,176 people
As such Mr. Berkowitz anticipates 3,200,000 visitors a year to SkyRise
equaling a yearly capture rate of better than 19% of the combined
resident and visitor populations.
Mr. Berkowitz also believes this to be a conservative projection and by
way of example cites the number of visitors to similar structures around the
world including The Empire State Building, The Eiffel Tower, The Statue of
Liberty and the Tokyo Sky Tree Tower.
I decided to look at those particular structures and run some numbers. The
following information comes directly from the respective websites of these
named structures and their respective locations.
The Tokyo SkyTree
Visitors Per Year: 6,000,000.
Tokyo Resident Population = 35,000,000.
Tokyo Visitors = 426,000,000 per year (approx.) An astounding number
compared to just about anywhere else.
Combined Visitor and Resident Population = 461,000,000.
SkyTree Capture Rate = 1.3%
Extrapolated to South Florida
16,817,176 x 1.3% =218,623 Visitors to SkyRise
Clearly this is far less than Mr. Berkowitzs projection of 3,200,000.visitors.
The Eiffel Tower
Visitors Per Year: 7,000,000.
Paris Resident Population = 2,340,000.
Paris Visitors = 70,000,000 per year (approx.)
Combined Visitor and Resident Population = 72,340,000. a year
Eiffel Tower Capture Rate = 9.7%
Extrapolated to South Florida 16,817,176 x 9.7% =1,631,266 Visitors to
SkyRise
Clearly this is far less than Mr. Berkowitzs projection of 3,200,000.visitors
to SkyRise.
The Empire State Building
3,500,000. Visitors a year
New York City Resident Population = 8,475, 500
New York City Visitors = 48,700,000 per year (2010 approx.)
Combined Visitor and Resident Population = 57,175,500.
Empire State Building Capture Rate = 6.1%
Extrapolated to South Florida
16,817,176 x 6.1% =1,025,848 Visitors to SkyRise
Clearly this is far less than Mr. Berkowitzs projection of 3,200,000.visitors
to SkyRise
The Statue of Liberty
Visitors Per Year: 4,200,000.
New York City Resident Population = 8,475, 500
New York City Visitors = 48,700,000 per year (2010 approx.)
Combined Visitor and Resident Population = 57,175,500.
Statue of Liberty Capture Rate = 7.3%
Extrapolated to South Florida
16,817,176 x 7.3% =1,227,654 Visitors to SkyRise
Clearly this is far less than Mr. Berkowitzs projection of 3,200,000.visitors
to SkyRise
Giving Mr. Berkowitz the full benefit of the doubt and even throwing in a
slightly higher number for argument sake lets say that SkyRise becomes
the most successful Observation Tower on earth having a projected capture
rate of 10%.
10% of the combined Visitor and Resident population of Miami-Dade
County Miami and The Beaches would be 1,681,718. people
Clearly this is far less than Mr. Berkowitzs projection of 3,200,000.visitors
to SkyRise
In point of fact it is almost 50% less than Mr. Berkowitzs projections.
BASIC ECONOMICS
TAKEN DIRECT FROM Mr. Berkowitzs Spreadsheet (attached below)
YEAR 5 ( First Full Year of Operation)
TOTAL Revenue $99,998,062
Expenses Before Debt Service $57,838,755
Cash Flow before Debt Service $42,149,307
Debt Service $18,325,000
Projected NET Cash Flow $23,140,479
Yearly Expense = 57,838,755. + Debt Service of $18,325,000. =
Total YEARLY Expense of $76,163,755 or $208,667.82 PER DAY
Total Revenue Per Person = $99,998,062 divided by 3,200,000 Projected
Visitors = $31.25 PER Visitor PER Visit
Assuming Mr. Berkowitz is correct that 3,200,000 People will Visit SkyRise
The project will do quite well and show a considerable profit.
If however the number of visitors is more in line with similar structures
around the world, at a max. of 10% of combined visitor and resident
populations Mr. Berkowitz will be in dire straights.
Extrapolating from Mr. Berkowitzs own projections he MUST have 6,677
Visitors PER DAY just to break even.
6,677 Visitors x $31.25= $208,656.25 Gross Income per Day -
approximately equal to his projected expenses of $208,667.82 PER DAY
IF his actual Visits are more in line with similar structures around the world
(adjusted by available Population/Visitors), the project will be bankrupt
almost immediately upon opening.
Combined Dade County/ Miami and the Beaches Resident/Visitor
Population = 16,817,176 x 10 % =1,681,717. Per Year Divided by 365 days
= 4,607 Visitors per day.
4607 Visitors per Day x $31.25 Per Visitor = $143,969. PER DAY GROSS
REVENUE
With Expenses Fixed at $208,656.25 vs Gross Revenue of $143,969.
means SkyRise Loses $64,687 PER DAY.
The Question then simply becomes will this project SkyRise capture a
greater percentage of the available population than the most Iconic
Structures on Earth?
In point of fact SkyRise will have to capture approximately 150% More of
the available population and visitors than the above noted structures to
break even.
As such it seems to be that Mr. Berkowitzs financial projections are highly
optimistic at best.
If his actual visitor numbers are in line with other similar yet more iconic
structures around the world, as adjusted by available populations and
visitors, this project will bleed red ink to the tune of approx. $64,000 PER
DAY starting on day one..
I doubt if even Mr. Berkowitz, a renown and respected developer, can
weather that storm for very long.
.
At that rate the project loses $23,360,000. in the first year of operation.
I would assume that well before that occurs the project goes into
bankruptcy.
In summary, all of the above numbers, except those related to extant
observation towers, are of a conjectural nature. No one can predict with
absolute certainty how many people will visit this project each day. Not I.
Not Mr. Berkowitz, nor his consultants. However if similar projects around
the world are used as a guide for analysis, this project is doomed to failure.
In the end We,The Citizens of Miami will have a 1000 Foot high problem on
our hands. The costs to the City of Miami can be astronomical if this project
does not perform as Mr. Berkowitz currently projects.
In the final Analysis this clearly appears to be a high risk project on Publicly
Owned Land.
Due to the possible extraordinary expenses the City may incur if this project
fails , I respectfully suggest that Mr. Berkowitz build his project somewhere
else and certainly not on our Public Land.
I urge the Miami City Commission to reject this proposal.
Sincerely,
Charles Corda
A note regarding Gambling
The Sub Lease between the owners of Bayside and SkyRise , pending
Approval by the Miami City Commission, specifically allows Gambling, if
approved in Florida, within the SkyRise Tower.
SkyRise Proforma Spreadsheet