Routes and Airports Channel

MIA seeks new revenue sources

By Adele C. Schwartz
ATW's Airports Today, August, 2009, p.1

In the final years of a $6.3 million airport redevelopment program, Miami International is looking at everything from a diversified shopping and services center to mineral extraction to gambling machines for the additional $500 million a year it will need to cover airport operations and debt service.

In the first six months of this year, MIA's passenger traffic was down 1.4% and aircraft movements off 9.3% compared with last year. It has lowered its landing fees 39% for the current fiscal year to help its airline tenants get through the recession.

Miguel Southwell, Miami-Dade Aviation Dept. deputy director-aviation for business development and retention, wants to capitalize on the fact that the city is a regular destination for Latin Americans who come north to buy personal and household goods at prices low enough to justify shipping them home, and often patronize the city's medical professionals. So he is looking for a private company to redevelop the airport's old, nearly deserted central terminal into a retail and services center aimed at Latin American customers. In addition to the usual clothing, gift and travel merchandise, stores would sell hard goods such as major kitchen appliances and automotive parts--"yes, radiators and fenders"--Southwell says. There also would be professional services like dental and medical clinics.

"We would like a developer to design and build a new central terminal in exchange for exclusive concession rights in that area," he says. Located between the new north and south terminals, "This would become the core and the focus of the airport." On July 23 he held the first of several meetings to discuss the concept with private companies.

He wants to create other "public-private investment programs" to develop airport-owned land and buildings at the department's four general aviation airports as well as at MIA. The decommissioned Opa-locka West airport is rich in limestone used to stabilize foundations for structures and roads built on South Florida's swampy soil and the county has applied for an Army Corps of Engineers permit to mine this stone. This could generate $20 million a year for the department.

In the Everglades swamp itself, the department owns 26,000 acres but uses only 1,000 of them for its Collier Training and Transition Airport. "Studies say there is petroleum there," Southwell tells ATW's Airports Today, and "we believe there is the potential for about $7 million a year in profit to the airport from it." He notes that the airport owns only about 30% of the mineral rights for the site.

The proposal that has drawn the most attention in the Miami press is the one to install slot machines in the terminal. Southwell explains that a special type of state permit will allow operators of quarter-horse races to also run slot machines and card rooms, not necessarily at the same location. So the airport would sublease one of several nearby quarter-horse tracks and hire a contractor to manage the racing, and then let another management contract to operate the slot machines at the terminal. He would like to install 1,000 gambling machines in all MIA's concourses, in walled-off areas behind security, "where the passengers would have to find them." This could yield $17 million annually to the airport, he estimates. The department has asked Dade County to apply for this permit by the Oct. 31 deadline.

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