Federal Judges Ruling Could Shape Miamis Future Growth
Written by Michael Lewis on March 28, 2013
By Michael Lewis
Three federal judges are pondering a case that could reshape Miami. Not to be disrespectful, their decision should be a no-brainer.
The appeals judges are deciding only whether to allow enforcement of a Florida law barring bidding on state and local government contracts by firms that do business in Cuba or Syria.
In fact, however, the judges could determine whether Miami International Airport prices out airlines and passengers, whether artificial barriers repel multinational firms, and whether the lowest priced or those best able to change the rules win government bids.
The legislation targets Odebrecht Construction, a Miami-Dade subsidiary of a Brazilian firm that does work in Cuba. Odebrecht for years has worked with Miami International Airport to plan Airport City, which would bring a 425-room hotel, office towers, retail, a meeting center, restaurants and more to the airport’s doorstep.
Odebrecht expects to fund the work privately, with the airport reaping $6.5 million to $7 million a year to repay debt from its $6.3 billion remake.
Multiple airport efforts to repay bonds include setting up a company to consult around the globe. But Airport City is the crown jewel. If state law stands, Odebrecht won’t get the contract and years of work must begin anew.
Without Airport City’s revenues, the airport would raise landing fees to repay bonds, because it gets no taxes.
But raising landing fees would lessen competitiveness with other airports. If fewer flights came here, we’d lose passengers and cargo. Miami relies on visitors and trade. Fewer air links would cut both.
At the same time, if state law stands that sets rules tighter than US policy, multinationals would reconsider settling Latin America operations here. Today, the ban hits Cuba and Syria, but tomorrow Miami-Dade might add Venezuela or another nation. That would make a Latin America headquarters here a liability.
Fewer headquarters operations could harm international banking, making Miami locations less useful. Impact snowballs.
This legal battle isn’t over Syria Ð or even Cuba.
The cause is that Odebrecht won big contracts that included Florida International University’s football stadium, work at Port Miami, the American Airlines Arena, the Arsht Center and more.
The lowest and best bidders should get government work. Bar the best and government would pay more Ð but competitors would prosper. Because law would exclude the lowest bidder, others could raise bids.
We hold no brief for Odebrecht. If others bid less, take them. But don’t set rules merely to remove a frequent winner, as this misguided law would.
Miami-Dade has a sordid history of using the specter of Cuba to enact bad policy.
When years ago AT&T and the former BellSouth dueled to provide the county’s pay phones, AT&T offered the county $50 million for the contract, BellSouth just $19 million. But BellSouth played the Cuba card, because AT&T had the only lines from the US to Cuba. That blocked a decision for years, nearly costing taxpayers $31 million.
That’s what artificially removing the best bidder does.
Under the county’s former Cuba policy, we lost an international track & field meet, a chance to host the Pan American Games, the first-ever Latin Grammy awards and more.
Now it’s state policy. But a November straw vote supported a similar Cuba bidding ban, which could become county foreign policy if this state law isn’t struck down.
The judges will rule based on none of these pitfalls. They will only decide on enforceability of a law that Gov. Rick Scott admitted in advance was unenforceable. Merely for political appeasement has the state defended this indefensible law.
You don’t get to be a federal appeals judge by being blind to facts. While the judges can’t focus on the impact on Miami of a law that would make us less competitive, they might consider the impact of allowing each of 50 states to make separate foreign policy.
Florida argued in last week’s appeal that the law wouldn’t harm Odebrecht because it isn’t bidding for state transportation work. But the law applies to every government agency, not just transportation.
Argued Odebrecht attorney James Moye, "If you can’t bid work, you’re out of business. That’s their lifeblood.Ó
An open business environment, in fact, is the lifeblood of the state, especially Miami. Surely, Gov. Scott isn’t anti-business Ð is he?
The infrastructure that Airport City would create would do far more for the county’s economy than any stadium, and it would be funded privately, with money sent to the government, not taken from it.
The law that the judges must rule on has such broad impact, but they are likely to focus on how a state law could supersede US foreign policy.