Transport Airports

Miami’s new futuristic airport to turn it into a destination in itself

Feb 15, 2013 7:00 am

Skift Take

Airports as destinations, a trend we outlined in our 2013 trends report, is becoming a reality with Miami’s new airport.

— Rafat Ali

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The futuristic plan for Miami International Airport envisions newly arrived visitors checking in at a four-star hotel to relax at a pool, corporate executives hopping onto a people mover to meet at a business center minutes away, and locals crossing the street from the terminal to pick up Fido at the pet spa.

And the airport wouldn’t pay a cent to build any of it.

Instead, a private developer, Odebrecht USA, would finance the $512 million project. In return, Odebrecht would run the new facilities for half a century, paying rent and a percentage of revenues to the county.

This is Airport City, a massive project — in the works for nearly five years — intended to create new funding sources for the airport by turning MIA into a travel destination itself.

On Wednesday, Miami-Dade Aviation Director Jose Abreu will announce at the annual “state of the ports” speech, delivered with PortMiami Director Bill Johnson, that, three years after the county selected Odebrecht’s bid for the project, Airport City will come before county commissioners for approval next month.

 

 

 

 

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“This can be the future,” Abreu said in an interview, calling Airport City “essential for us to be able to move forward.”

The reason: The more money the county-owned airport makes from non-aviation sources such as concessions, the lower the landing fees and other charges have to be paid by the airlines that bear the financial burden of operating MIA. During Odebrecht’s 40-year agreement with the county, with an option to renew for 10 more years, the airport could receive nearly $580 million in operating revenues.

“The more business we get, the more the airport gets,” said Gilberto Neves, president and CEO of Odebrecht. The company approached the county with the Airport City idea more than four years ago. Miami-Dade later put the project out for bids, and Odebrecht won.

Airport City would represent a capstone of sorts for MIA, which has spent about $6.3 billion and more than a decade — partly because of delays, cost overruns and, in some cases, corruption — expanding. The airport’s chief contractor: Odebrecht, which, as part of a joint venture with Parsons, upgraded the North Terminal, built a new South Terminal and put up the rails for the MIA Mover train that connects the airport Metrorail station to the terminal.

For Abreu, who was hired in 2005 to take control of the troubled capital-improvements program, launching an airport city — like the ones that exist in places such as Beijing, Frankfurt and Dallas/Fort Worth — is part of the legacy he hopes to leave when he retires at the end of March.

“The great thing about it is, it doesn’t hit our books” to develop the project, Abreu said. “There’s no downside.”

As part of the project, Odebrecht , which is working on a $4 billion mixed-use Rio de Janeiro port redevelopment project known as “Porto Maravilha,” would make the investment — and take on the risk — to develop, in phases, 33 acres east of the airport’s terminals and parking garages.

The county would retain ownership of the land, and the assets would revert to Miami-Dade at the end of Odebrecht’s agreement.

The project is divided into three parcels:

–A $359 million business center, with corporate offices, meeting space, a hotel and a new station for the MIA Mover train;

–A $141 million hospitality center, featuring a four-star hotel and dining and meeting space, and;

–A $12 million convenience center, providing space for services such as a dry cleaner, convenience store, gas station and pet hotel/spa.

Neves said Odebrecht would build the hospitality and convenience centers first, while securing interest in the business park. The entire project would take five to seven years to complete once construction begins. The company has committed to ensuring 14 percent of its vendors are small businesses, he said.

As part of the project, Odebrecht would pay to move the airport’s “central base” — a hub of maintenance warehouses near the entrance — to a less attractive parcel behind MIA.

Earlier incarnations of Airport City envisioned a medical tourism hub and an energy plant. Both ideas have been scrapped — the medical hub over questions about demand and competition with the Jackson Health System, and the energy plant over security concerns next to an airport. Also gone: a plan to rebuild the existing airport hotel, which will remain in the terminal.

Abreu had hoped to give commissioners a taste of the project during Wednesday’s speech and bring it to a preliminary committee vote Friday. But the vote has been delayed because the Federal Aviation Administration has yet to officially wrap up its Airport City review.

Late comments to the FAA from the state raised questions — which Abreu described as minor — about documenting the historic characteristics of an airport building that once served as the headquarters of National Airlines and Pan American Airways.

Once commissioners take up the project, it may face another obstacle: politics.

Odebrecht USA is a subsidiary of a Brazilian engineering-and-construction conglomerate, Odebrecht S.A. One of the conglomerate’s affiliates — separate from the Coral Gables-based U.S. company — is expanding the Port of Mariel in Cuba.

In an attempt to stop Odebrecht USA from obtaining more local contracts, Miami-Dade lawmakers successfully sponsored state legislation last year prohibiting the state and municipal governments from hiring firms whose affiliates work in Cuba. A federal judge in Miami found the law unconstitutional; Gov. Rick Scott’s administration has appealed.

After the law’s court defeat, commissioners placed a non-binding question on the November ballot asking voters if the county should be prohibited from hiring firms with ties to state sponsors of terrorism, such as Cuba. The measure passed, with 62 percent support.

Abreu called commission politics “above my pay grade,” saying only that scuttling the project after Odebrecht was chosen over another bidder would delay Airport City for years.

Expect his department to emphasize the airlines’ support. James Burchett of AvAirPros, which represents MIA carriers, issued a statement praising Airport City, which it said “significantly enhances customer service at MIA” and “provides a much needed economic stimulus to the County.”

And Odebrecht will tout the number of jobs and economic impact the project could create. A study by the Coral Gables-based Washington Economics Group commissioned by Odebrecht in 2011 estimated construction would create about 5,800 jobs and $827 million, and operations about 10,000 jobs and $1.6 billion.

A previous version of this article misstated the acreage of the Airport City project. ___

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