Commissioners Blast Officials In Rejecting Airport Retail Contract
Written by Suzy Valentine on July 14, 2005
By Suzy Valentine
A rejected contract awarding the operation of retail outlets at Miami International Airport to the sole bidder could have resulted in an $18 million deficit over its nine-year life, a county commissioner warned.
Miami-Dade County commissioners had planned July 7 to execute an agreement handing the deal for the North and South terminals to Westfield Management Co.
Instead, the county commission voted to reject all bids for retail, effectively resuming the bidding process.
The Regional Transportation Committee had made a recommendation June 8 to execute the contract.
One requirement in the request for proposals was that the retail operator meet a minimum annual guarantee of $1.3 million and provide minimum rent of $2 million.
Commission Chairman Joe Martinez said it appeared that a contract with Westfield could have led to a $2 million shortfall for each of its nine years.
A colleague agreed the numbers fell short.
"I read the response," said Commissioner Carlos Gimenez. "It said so much for rent and we were short by more than $1 million in the middle."
Commissioners also argued that the only bid received by the Miami-Dade Aviation Department by April 15, Westfield’s, was defective and should have been rejected outright.
"It’s kind of embarrassing to me as chair of the transportation committee that it was given to us," said Mr. Gimenez. "We should have never gotten it. It was non-responsive from the get-go."
A second attempt at soliciting bids could get off the ground in two weeks.
The aviation department has tentatively set July 28 as the date for an industry review meeting.
On that basis, a revised request for proposals could be advertised next month with a deadline in October.
Following a month or two of evaluation, the department hopes to make a recommendation in December to the Regional Transportation Committee that will go before the full commission in January 2006.
The commission heard last week that aviation staff had entered into discussions with the vendor to bring the proposal up to standard – talks that some argued were inappropriate.
"We don’t ask to negotiate on these things," said Mr. Gimenez. "These things are non-negotiable."
The airport’s manager of commercial operations and aviation properties had said proposals were hard to secure because businesses saw airport procedures as less than transparent.
Commissioner Natacha Seijas challenged those assertions by Patricia Ryan, which she had seen on videotape.
"Commissioner Dennis Moss asked why weren’t there any more companies submitting bids," Ms. Seijas said. "Mrs. Ryan answered, ‘We got feedback from a couple of folks that prior to the request for proposals going out that they may not be inclined to participate in Miami International Airport because… we’re somewhat considered to be a politically active airport and if they do not have a large cash pot to pay for lobbyists and the support network…. They felt they were at a disadvantage and could not overcome that disadvantage.’"
Ms. Ryan told the commission the Parody Shop, Bruce Fuhrer and Hudson News were among businesses that didn’t feel they would be participating in a fair competition.
Ms. Seijas countered that companies had raised concerns about the terms and conditions of the request for proposals.
"Apparently, you chose to ignore the suggestions from the marketplace rather than admit your own failure," she said. "You wanted the public to believe the problem was one of politics. The problem is the failure of staff and the consultants at the airport to prepare a good bid package.’"
One commissioner alleged that, besides poor drafting, requests for proposal could be stacked so as to deliberately exclude some participants.
"You can actually tailor a request for proposals," said Mr. Martinez, "that only two people can bid on."
"People are going on to the Internet and nobody is bidding on them. These requests for proposals have just not worked out," said Mr. Moss, who cited Memphis International Airport as having secured large numbers of competitive bids for projects and attracting substantial local participation.
Ms. Seijas said she was troubled at failures to involve county businesses.
"Apparently the staff of the consultants also believe that it would not be good policy to encourage potential developers to include local businesses," Ms. Seijas said. "Every airport and seaport makes a solid effort to ensure that local business people participate in the concessions at the airport. However, at Miami International Airport we do nothing to encourage the national companies to include local businesses in their programs."
The commission heard that of the 36 store spaces that Westfield was to fill, eight had been targeted for disadvantaged business enterprises, three of them local.
County Manager George Burgess recommended that future requests for proposals further subdivide packages from one with 36 stores and two with 35 into six or seven bundles of up to 12 outlets.
"Those smaller groupings promote competition," Mr. Burgess said. "Therefore, more folks out there that can bid on those kinds of groupings. Then you can keep a number of storefronts that can be direct leases."