The four-day fair is credited with helping transform Miami's image from one of weekend beach frivolity to an emerging mecca for the performing and visual arts.

An estimated 50,000 visitors flocked to the fair in 2011, according to the city's tourism promotion agency, and more are expected this year.

"Prior to Art Basel we had eight galleries. We now have over 140 in Miami-Dade County," said Norman Braman, a billionaire car dealership mogul and chair of the local committee that works with the fair's organizers.

Art Basel Miami Beach was launched in 2002 to expand the reach of a proven North American art market and seize on Miami's position as a gateway to the emerging market in Latin America, said Marc Spiegler, director of MCH Swiss Exhibition Ltd, which owns and operates Art Basel fairs in Miami, Switzerland and Hong Kong.

"Everyone assumed Latin America was going to develop and everyone felt it was opening up toward international art in the same way we now see the Asian collector base," he said.

Since 2002 the fair has expanded to include a host of satellite art fairs, spilling over into other, less fashionable areas of greater Miami.

"What Art Basel has promoted is a whole series of other fairs ... and those fairs have actually served as meeting points for artist, dealers, galleries and collectors," said Axel Stein, head of Sotheby's Latin American art department.

"Art Basel has been that magnet that has put together all of these people in the same room."

Civic leaders point to Art Basel as a sign of how the area has sought to cast off its reputation as a cultural wasteland, led by a growing philanthropic community, including some major art collectors.

In the early 2000s a public-private partnership built the half-billion dollar Adrienne Arsht Center for the Performing Arts, lauded as the start of downtown Miami's cultural renaissance. Today work is underway on a more than $200 million bay front art museum designed by the Swiss firm of Herzog & de Meuron, which will open next year.

On Miami Beach, a state-of-the-art hall for Miami's New World Symphony, designed by California architect Frank Gehry, opened to national acclaim in 2011.

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During the rest of the year when Art Basel isn't in town, a growing movement of artists, restaurateurs and nightlife impresarios has transformed Wynwood, once a blighted neighbourhood, into a vibrant scene, decorated with murals by celebrated graffiti artists Shepard Fairey and Banksy.

This year more than 1,000 galleries applied to be at Art Basel and 260 were selected, organizers say. Those that are not accepted, vie for space in the satellite fairs, such as the New Art Dealer's Alliance, which Spiegler said serves as "proving ground" for emerging galleries and artists from around the world.

At the exhibiting galleries, prices range from a few hundred dollars at smaller fairs to the tens of millions at the main event, Art Basel Miami Beach, where it's not uncommon to find works by Pablo Picasso, Andy Warhol and Jeff Koons. The fair never releases total sales, but estimates last year put the total value of work on display at Art Basel between $2 billion and $3 billion.

Galleries reported busy early sales this year with prices varying from $80,000 up to $4 million for one work by German abstract artist Gerhard Richter, according to The Miami Herald.

The fair is also a forum for banks and other companies to court high-net worth individuals and families. Swiss bank UBS AG (UBSN.VX) has been the title sponsor since the fair was launched.

Others include NetJets, a private jet-sharing company owned by Warren Buffett's Berkshire Hathaway Inc (BRKa.N), luxury automaker BMW (BMWG.DE) and cigar maker Davidoff.

New York gallery Wallspace has shown work at the fair for the past five years. Director Jane Hait said it's a chance to see far flung colleagues and collectors, and develop relationships with potential clients.

Wallspace had to scale back its plans for big client dinners at Art Basel this year as it was one of the galleries in New York City's Chelsea neighbourhood that sustained massive damage from Hurricane Sandy in October.

"All of the galleries on our block have basement storage space which was completely submerged," Hait said. "We had about six-and-a-half feet of water in our basement that came through the building."

She estimated nearly $1 million of damage, yet the disaster and recovery effort didn't derail plans to show in Miami.

"If we go to a fair and meet a couple of interesting smart new clients who we don't already know, that's a success," Hait added. (Editing by David Adams, Jill Serjeant and Vicki Allen)

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