County Seeks Developer For Airport Hotel
Written by Claudio Mendonca on September 8, 2005
By Claudio Mendonca
Miami-Dade County is seeking a developer to build and run a hotel at Miami International Airport.
The aviation department is paying $150,000 to year-old hospitality consulting firm Adelfi, founded by two former Miami hotel executives, to find a developer.
"We are still in the early stages of deciding on what our options are," said airport spokesman Greg Chin. "Adelfi has been hired to help us explore all of our options, which include additional renovations of the existing three-star, 254-room hotel or building a completely new hotel on the grounds of the airport."
The initial goal is to build a four-star hotel with 300 to 400 rooms, said Patricia Ryan, the department’s manager of commercial operations. Nevertheless, she wants to wait for the consultant’s decision on whether to build a new hotel or just upgrade the existing one.
"The last five years we have been running on over 100% occupancy [at the existing hotel at the airport], so there has been an unsatisfied demand out there," said Ms. Ryan, and a survey in 2003 by airport consultant Leigh Fisher & Associates detected the need for a hotel on airport property.
The existing hotel grosses $10 million a year, said Mr. Chin, $4 million of which goes to the aviation department.
The county owns the existing hotel in Concourse E, built in 1959, but HI Development Corp., a former Holiday Inn company, operates and manages it.
Renovations of both of that hotel’s towers should be completed by June, Mr. Chin said. North tower work started in 2004 and should be finished by year’s end. Renovations in the south tower would follow and be done by June. Upgrades include additional staircases and safety requirements.
Selected in late July after a county bidding process, Adelfi is responsible for researching and drafting an invitation to negotiate. According to Adelfi executives, one possibility is to build a 250- to 300-room hotel in Terminal E across from the existing hotel in that terminal, or possibly at another site.
Since 2003, the airport has been trying to find a private partner to renovate, manage and expand the existing hotel. Seventeen companies showed early interest but none bid.
"The goal of the aviation department is to build a new hotel," said Gil Katzman, principal of Adelfi and project manager. "Miami has a world-class airport and deserves a major internationally known, brand-name hotel."
Mr. Katzman said Adelfi was hired to determine what size hotel to build. The company is drafting an invitation to developers to negotiate and, with construction firms and the airport, set the cost of building a hotel. Adelfi and the airport are also assessing how much profit that hotel might return to the county.
"We are assisting the airport because of our expertise in the hospitality industry," said Mr. Katzman, who worked in Miami hotels 10 years prior to opening Adelfi.
The aviation department will pick the developer. Mr. Katzman said his company is hired until that is done, in "hopefully in six to seven months,"
Once a new hotel is finished, the county might tear down the existing one or leave it as is.
"Adelfi has been hired to help us explore all of our options," Mr. Chin said. He said airport officials will solicitation proposals next year.
Adelfi is to find interested major hotel franchises and developers and help the aviation department create a solicitation document enabling potential developers or interested parties to propose development of a hotel.
"Adelfi won the bid to formulate an invitation to negotiate," said Mr. Martinez, Adelfi president.
"The size of this new hotel would be comparable to the current hotel in Miami Airport," said Mr. Martinez, who said Adelfi is still assessing how many rooms are needed.
"Our main goal is to do research so we can recommend developers," said Mr. Martinez. He said he expects the invitation to be completed in four months.
Criteria include a developer who is in compliance with county permitting, is able to get financing and has security qualifications, Mr. Martinez said.
"We have been working with the aviation department to develop terms in the negotiation so they can develop a document and make it attractive," he said. "For the airport, the deal has to be profitable."