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Front Page » Top Stories » Allegations Swirl In Airport Hotel Contract

Allegations Swirl In Airport Hotel Contract

Written by on July 12, 2012

By Lou Ortiz
Despite allegations that a hotel employee stole $100,000, a county commission committee Monday rejected a proposal that would have changed the management of the Miami-Dade County-owned hotel at Miami International Airport.

The Regional Transportation Committee denied a request to waive competitive bidding and turn hotel management over to Turnberry Miami LLC, whose managing partners — Jacqueline and Jeffrey Soffer — are part of the Turnberry Group.

H.I. Development Corp., based in Tampa, now manages the 252-room hotel. The hotel, at Northwest 20th Street and LeJeune Road, also has seven suites, meeting rooms and a restaurant.

H.I. Development, founded in 1959, has been developing and managing hotels in Florida, the US, Central American, the Caribbean and Europe, the company website says.

Aviation Director Jose Abreu told the committee that he and other officials at the airport had "lost confidence in H.I. I am just not comfortable."

In July 2011, "an employee was caught stealing $100,000 and ended up in jail," said Mr. Abreu, adding that he wouldn’t recommend H.I. to continue managing the hotel.

Officials at the meeting said an audit of the hotel is underway and authorities are engaged in an ongoing investigating.

Outside of the meeting, Miguel De Grandy, an attorney for H.I., said he didn’t know what authorities were investigating but "everyone is entitled to their day. [But] this is not about the company."

He said H.I. didn’t bid to continue managing the hotel because terms of the county’s request for proposals weren’t economically feasible and didn’t conform to industry standards.

"Subsequent to submission of proposals, county staff made material changes to the very economic terms that my client objected to, which provided an unfair economic advantage to only one proposer, contrary to well-established Florida Procurement law," Mr. De Grandy wrote in a letter to Commissioner Javier Souto, a committee member.

According to county documents, only two firms bid to manage the hotel, Turnberry and Tria Adelfi Consulting, with offices in Coral Gables.

A county committee picked Turnberry and later agreed to changes in the request for proposals — regarding financial responsibility overpayments for health insurance, liability insurance and workers’ compensation — thereby changing the bid specifications. Once the official request for proposals was changed, the county committee sought the bid waiver, instead of rebidding the contract.

During the committee discussions, Mr. De Grandy told commissioners that the bidding process for management of the hotel was "contrary to law and public policy." "The issue here today," he said, "is the integrity of your [county] procurement process."

He said if all contract specifications had been laid out at the start "you could have had 15 bidders. Re-bid and see what you get… but do it the right way."

Mr. Abreu told commissioners the process wasn’t ideal. "We thought it [the process] was clear," he said. "But we’re not perfect."

"The waivers are within your jurisdiction," Mr. Abreu told the committee. "This process is not ideal. But this is a different animal, knowing what I know."

Commissioner Sally Heyman said when she learned Turnberry received the contract "I was excited. As much as I like Turnberry, and as much as I would like to see your problems go away… I think it’s a terrible, terrible precedent. You can’t stand who you got, so you change the rules?"

"I think it’s bad for Miami-Dade County to air our dirty laundry," she said. But, she said, the integrity of the bidding processing "rests with us."

Commissioner Audrey Edmonson agreed. "I’d rather go by the book," she said. "This issue is about the integrity of the procurement process. I don’t want to set us up for a lawsuit."

Ms. Edmonson also defended H.I. "You have to prove someone guilty," she said, "not prove someone innocent."

After rejecting the contract, the committee voted 4-1 to fast-track rebidding, hoping to wrap up the procedure within 90 days.

The failed contact with Turnburry called for a 10-year term, including three renewable one-year extensions. Gross revenues were estimated at $155 million over the term, with management fees and operational expenses pegged at $103 million.

Under the Turnberry contract, the Aviation Department would have netted about $5.2 million a year, or 34%, after management fees and operating expenses.

The Turnberry Group, which also manages property, has developed more than $7 billion in commercial and residential property, according to its website. Locally, the firm developed 785 acres of swamp and marshland into Turnberry Isle Miami and Aventura Mall.

The firm is led by Mr. Soffer, who directed the $500 million makeover of Fontainebleau Miami Beach.

Turnberry projects include Turnberry Tower Arlington in suburban Washington, DC; Turnberry Place in Las Vegas, and The Residences at Atlantis, Paradise Island in the Bahamas.

The firm was founded 50 years ago by Donald Soffer, who built a shopping center in South Hills Village in Pittsburgh and in 1967 bought the 785-acre tract in north Miami-Dade.To read the entire issue of Miami Today online, subscribe to e -Miami Today, an exact digital replica of the printed edition.