MIA's Central Terminal shops battle for turf as airport seeks new tenants

April 16--Miami International Airport's Central Terminal is emerging as one of the latest battlefields for lucrative county contracts.

While the aging terminal handles just 10 percent of MIA passengers, shops and restaurants there are fighting to hold onto their turf as airport executives urge the Miami-Dade Commission to seek new bids for the space.

Aspiring concessionaires and others -- including the airlines -- want fresh competition in a venue where some businesses have held a grip for as long as 19 years.

"The perception is when contracts for concessions end, they never really end,'' Miguel Southwell, MIA's deputy director for business, told commissioners at a March 29 workshop. "The Central Terminal has some of the finest concessions you will find. We're not talking about them doing a bad job. It's just a matter of creating an opportunity for competition.''

With the Central Terminal targeted for redevelopment over the long term, airport administrators envision offering four-year contracts with options for four, one-year extensions for concessions in the space, which houses a host of carriers, including Delta Air Lines, AirTran Airways and British Airways.

"We'd like an opportunity to look at the Central Terminal and provide you with the best bagels in the country,'' Brian Bowdish, vice president of Brooklyn Water Enterprises in Boca Raton, told commissioners.

"You have an opportunity to increase non-aviation revenue,'' added James O. Burchett, a vice president at AvAirPros, which represents MIA carriers. "The airlines ask you to move forward and put the contracts out to bid.''

The more revenue the county-owned airport gets from concessions and other non-aviation sources, the lower the landing fees and other charges the airlines have to pay.

But the incumbent restaurants and shops are lobbying hard against such a move, arguing the Central Terminal's future redevelopment is too uncertain to look for new tenants.

"This is not the time to go to public solicitation,'' said Raymond J. Kayal Jr., president and CEO of NewsLink, a fast-growing Miami-based concessionaire with stores in the Central Terminal and elsewhere in the airport. It would be hard for businesses to bid for a Central Terminal contract without a vision of when and how it will be rebuilt, he said.

Brenda Rivers, president and CEO of Carrie Concessions, told commissioners she works as a "business partner'' with the airport and converted her mom-and-pop restaurants in the Central Terminal to brand-name outlets like Dunkin' Donuts, Häagen-Dazs and Subway that generate higher revenue.

Rivers, who has had businesses in the terminal for 19 years through contract extensions, urged commissioners to give tenants more time before seeking new bids -- "at least three years to grow in stature and grace together.''

The shops and restaurants in the underutilized Central Terminal, which connects the North and South, have endured protracted disruptions during the North Terminal construction. For a long time, a construction wall forced passengers outside the Central Terminal when walking between north and south -- steering them away from pre-security shops and restaurants.

"You have a place without a lot of [passenger] volume. We suffered while construction was going on. It doesn't make sense'' to put the concessions out for bid, said Jose Alberni, a managing director and co-founder of MCA, a Miami-based concessionaire that runs the Chili's To Go in the Central Terminal, among other outlets, and wants more time to recover its investment in the terminal.

But the tenants have gotten breaks, too. Concessions, which share revenue with MIA, usually pay a minimum annual guaranteed rent, but the commission last December eliminated that so-called MAG for various Central Terminal tenants, while extending their stay through next January.

Southwell and aviation Director Jose Abreu had hoped to solicit bids for the Central Terminal concessions before March 31, but the commission, facing pressure from tenants, is taking more time to decide what to do.

At the workshop, commissioners listened to the incumbents and those aspiring to get a toehold at MIA, but offered no conclusions on the issue. Commissioner Bruno Barreiro, who chaired the Regional Transportation Committee workshop, said he is considering asking Commission Chairman Joe Martinez to bring the issue before the full board.

"Not so much the concessions, but what are we going to do with the Central Terminal?'' Barreiro said. "That determines the issue of the concessions.''

Over the long term, the airport envisions redeveloping the Central Terminal to bring it up to par with the north and south sides.

According to director Abreu, that could cost between $2.5 billion and $4.5 billion. But no one knows at this point what it would look like or how it would be paid for.

The airport, already saddled with heavy debt, would likely have to consider a public-private partnership or some other alternative financing scheme. MIA administrators estimate the airport will need a new Central Terminal by 2021.

Incumbent shopkeepers say they've already made investments in their stores, but newcomers won't want to come in knowing the terminal may be under construction in a few years.

"The airport is going to lose revenue at the end of the day because of an interruption of service. And passengers are going to be inconvenienced,'' said Chris Korge, NewsLink's chairman. "Until plans become more concrete and we can come up with fresh new concepts, this is all premature.''

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