Re-Open Florida: Construction staying afloat, real estate and transportation on edge

In this March 28, 2020 photo provided by Juan Huergo, Laura Gabaroni and her husband Juan Huergo take a selfie on board a tender after they were evacuated from the Zaandam, a Holland American cruise ship, near the Panama Canal. The Orlando- area couple was transferred to the Rotterdam, together with others who were deemed healthy. Four people have died on board the Zaandam and many others have are suffering from flu-like symptoms. (Juan Huergo via AP)

The third meeting of the Re-Open Florida Task Force group on the hardest-struck businesses was less a brainstorm of best practices than a review of the status of each industry.

Prior meetings of the working group, which includes leaders from small businesses and the hospitality and tourism industries, revealed a demand for small businesses to open soon, but with clear guidance on what safety measures they need to take. However, unlike other industries, construction, real estate and transportation never really stopped.

Of the three industries, construction and real estate, two of the hardest-hit sectors during the Great Recession, are performing the best. Yet the real estate industry won’t feel the greatest effects of the induced recession until May when rent checks start coming in — or, rather, don’t.

With a strong first half to March, many businesses earned enough to cover April rent, as did apartment renters. But Dev Motwani, President and CEO of Merrimac Ventures, expects that to change for May and June.

“Of course, as some people got behind in April, they may be able to make partial payments, it’ll be harder to do the same in May while you’re still catching up,” he said.

Knowing when businesses will reopen could help property owners know when to expect rent checks again as businesses get cash on hand again.

While real estate sales are down in general, the ratio of completed sales to tours is up because fewer people are shopping for properties. With stay-at-home orders and the threat of illness, only people who are seriously considering moving are viewing properties.

To keep employees and guests safe, the broker will let guests in for self-guided tours and in smaller groups, a practice that could continue as the state reduces restrictions on businesses.

But with the industry’s vitals looking good prior to mid-March, and as people continue moving to the state, Florida Realtors CEO Margy Grant said she believes real estate markets will rebound.

“As this crisis was not born out of a financial or a housing-related issue, the hope and expectation is that the Florida real estate will weather this storm hopefully quite well,” Grant said. “Pent-up demand of people pushing the pause button rather than the stop button will be released once it’s safe to do so.”

Additionally, with public planning and zoning board hearings postponed or limited, construction approval has reached a bottleneck. Still, projects already underway have continued unabated.

Earlier this month, the Department of Transportation (FDOT) announced it was expediting several highway projects across the state. The Interstate 4 Ultimate Project in Orlando, highlighted earlier this month, is getting a one- to two-month boost with contractors taking advantage of the limited traffic.

In Tampa, contractors erected overpass beams six days ahead of schedule after closing the street below in a project to widen Interstate 275. Other projects have been accelerated by as much as three months.

“This acceleration effort has expedited getting goods to market and continues to provide much-needed jobs throughout the state,” FDOT Secretary Kevin Thibault said.

In firms like Rob Kornahrens‘ Advanced Roofing and Green Technologies, teams are revising their public health practices at least once a week. Workers now take their temperature before leaving home and again on the job site. Additionally, workers use face masks and avoid sharing tools as additional precautions.

Still, 40% of the construction workforce is at risk of unemployment and 87% of employees are employed by small businesses, said AJ de Moya, vice president and general manager of The de Moya Group.

“During the Great Recession, the construction workforce was decimated, and many workers never returned to our industry. We can’t afford to lose them again,” he said, highlighting the importance of training workers laid-off during the pandemic in construction.

Tied to the effectively frozen tourism industry, transportation has taken a hit in Florida. Airports across the country have seen a 97% reduction in activity, said Tampa International Airport CEO Joe Lopano.

“We have planes that would normally be carrying thousands of passengers parked across the airfield, and the rental cars that our visitors would normally be driving in are parked all over our campus,” he said.

Airports are encouraging mobile boarding passes and carry-on luggage to reduce passenger-employee interactions and spreading out security lanes and seating. Tampa International is using only every other gate.

Ted Christie, President and CEO of Spirit Airlines, said public health solutions need to be “end to end,” encompassing taxis, rental car counters and tourist destinations, not just the airlines, which Gov. Ron DeSantis made an early focus of the state’s response.

“Consumers will be confident to travel only when they see the whole process as clean and safe,” Christie said.

Although other travel never stopped, cruise ships are empty of guests. Rick Sasso, Chairman of MSC Cruises’ North America branch, said he couldn’t predict when cruises will reopen, or if all cruise lines will do so on the same schedule, but he noted that bookings for 2021 travel are already significant.

When cruises restart, the industry — which became an early fixture as the pandemic reached the United States — will need to make the ships as safe as possible. Sasso said MSC Cruises plans to screen and take the temperature of passengers and prevent people traveling from hot spots to board as well as maintain efforts while at sea.

The Governor has fielded questions on why only a handful of health experts sit on his task force. But on Thursday, Dr. Lillian Rivera, a former Miami-Dade Department of Health official, again made herself known on the call. She noted she was pleased every presentation involved what their businesses have done to implement U.S. Centers for Disease Control and Prevention COVID-19 guidelines.