Carl Icahn, one of the most successful hedge fund managers in the country and the 31st wealthiest person in the United States, according to Forbes, just made a new bet: Miami.

The billionaire announced last week that he is moving his company’s home base to Miami Beach, Florida.

Icahn’s choice of Miami points to the region’s recent ascension as a business destination. In the past five years, more than 100 financial services firms have relocated to South Florida from other states, often from higher-tax states in the Northeast. Barry Sternlicht, the co-founder, chairman and CEO of the $50 billion Starwood Capital Group moved the company’s base to Miami Beach in 2016.

Following a long period of speculation, Icahn, who has a reported net worth of $17.6 billion, took steps last week to complete his company’s move to the Miami area. While taxes have headlined the billionaire’s decision, they are often only the tip of the iceberg when companies consider a major relocation. Access to talent, business services, connectivity and cost of doing business are big pieces in the relocation puzzle.

According to the Washington Tax Foundation, Florida is the fourth-most tax efficient state in the country, behind only Wyoming, Alaska and South Dakota. But when combining tax efficiency, in conjunction with the other key relocation considerations, the picture looks very different.

Miami outranks all of the top five most tax-efficient destinations by a wide margin when it comes to access to talent, business services and connectivity. The most comparable labor market is Anchorage in Alaska, with a labor pool five times smaller and its business services sector 20 times smaller than metropolitan Miami.

Miami is also the most connected city. Both the number of airlines, as well as the destinations covered by Miami International Airport, far surpass any of the other top five most efficient city airports.

The cost of doing business often comes into play when a city meets access to talent, business services and connectivity criteria, and Miami does not compare favorably.

By comparing office rents per square foot as a proxy to the cost of doing business, Miami is far more expensive than any of the other top five most tax-efficient cities. Miami is also expensive when compared to high-tax northern states, ranking second only to New York City, the country’s most expensive office market.

This helps explains why Miami has, so far, been able to attract companies that carry large valuations or manage large sums of money, but has found it more difficult to convince companies with large work forces to relocate there. This will likely continue to be a real challenge for the city.

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