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Week of May 06, 2004 |
Aviation department wants to spend $12 million on airport hotel
By Samantha Joseph and Susan Stabley The Miami-Dade County Aviation Department wants to spend $12 million to renovate Miami International Airport Hotel and make it more attractive to private companies that might operate it. The move is a reaction to unsuccessful efforts that began last year to find a private partner to take over and redevelop the hotel on the airport's eighth floor. The county wants to alter its procedures to allow more negotiations and greater communication with interested groups, said Patricia Ryan, the department's manager of commercial operations. Under the plant, the department would pay all renovation costs for the 45-year-old hotel that was last refurbished more than a decade ago. The industry standard is to refurbish about every five years. The renovation would increase room sizes, raise ceilings, replace furniture and refurbish the hotel's main restaurant, bringing the property in line with modern three-star requirements. The hotel's annual revenue has averaged about $4.5 million in the past five years - down from about $6 million in earlier years. The county's proposal for bidders allowed for a two-year renovation period, but no bidders applied. The offer was closed in February after being extended. "We have been in conversation with many hotel operators, and we have learned that they might prefer to build a new hotel in the adjacent area and not take on the responsibility of renovating the existing hotel," said Ms. Ryan. The new plan could limit a private partner's involvement to expanding the hotel. Ms. Ryan said completion of an addition would take about four years. "We have opened up the concept to allow them only to expand to the adjacent site, if that would be their preference, therefore not requiring them to renovate the existing site," she said. The new plan would lift the county's requirement that the partner operate the hotel, as the aviation department would continue to run the hotel through a management agreement with HID Co. The proposal would waive a $4.5 million annual fee - a major sore spot for potential investors, Ms. Ryan said. To continue to serve passengers and maintain the property's income, the county will reconsider plans to close the hotel and have a private firm reopen it. The new proposal would keep the hotel open during renovations. The aviation department will seek greater leeway in its dealings with prospective partners. "Conversations and negotiations were stifled by the competitive process," Ms. Ryan said. "Our hope is that the process that can be used in the future will allow conversation between proposed developers and the airport staff to resolve any unclear issues and to be able to negotiate an agreement. ... The only difference is that the airport will be authorized to negotiate with interested parties." Ms. Ryan said two companies have indicated an interest in the new proposal, which is set to go this month before the county's transportation committee for review. Under the original offer, the private partner could have expanded the hotel to a neighboring lot, which the county uses for short-term parking and draws $4.5 million in annual profits. To reimburse the county for lost parking revenue, the company would pay a $4.5 million annual fee. No companies submitted proposals, but about 17 indicated interest. Continental Hospitality Holdings Ltd. considered the offer, but in February, its chairman and CEO, Sherwood "Woody" Weiser, cited "insurmountable hurdles" to justifying costs. |
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