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RESOLUTION AWARDING ADVERTISING DISPLAY PROGRAM AGREEMENT AT MIAMI INTERNATIONAL AIRPORT, RFP NO. MDAD 05-06 TO CLEAR CHANNEL OUTDOOR INC. D/BA CLEAR CHANNEL AIRPORTS, FOR A TERM OF TEN YEARS, AND WITH A MINIMUM ANNUAL GUARANTEE OF $4.5 MILLION DOLLARS; AUTHORIZING THE MAYOR OR MAYOR�S DESIGNEE TO EXECUTE AND ENFORCE THE AGREEMENT AND THE TERMINATION AND EXTENSION PROVISIONS CONTAINED THEREIN

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WHEREAS, this Board desires to accomplish the purposes outlined in the accompanying memorandum and documents, copies of which are incorporated herein by reference,

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMI-DADE COUNTY, FLORIDA, that this Board hereby awards the nonexclusive Advertising Display Program at Miami International Airport, Agreement No. MDAD 05-06 to Clear Channel Outdoor, Inc. d/b/a Clear Channel Airports, as set forth in the attached memorandum from the County Manager; this Board authorizes the Mayor or Mayor�s designee to execute and enforce the Agreement between Miami-Dade County and Clear Channel Outdoor, Inc. d/b/a Clear Channel Airports, for a term of ten years and for a minimum annual guarantee of $4.5 million dollars, in substantially the form attached hereto and made a part hereof and to exercise the termination and extension provisions contained therein.

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Date:

To: Honorable Chairman Dennis C. Moss
and Members, Board of County Commissioners

From: George M. Burgess
County Manager

Subject: Award Recommendation-Request for Proposals (RFP) for Advertising Display Program
RFP No. MDAD-05-06

STAFF RECOMMENDATION
RECOMMENDATION
It is recommended that the Board approve the award of a Non-Exclusive Concession Agreement to Clear Channel Outdoor, Inc., d/b/a Clear Channel Airports (Clear Channel) for an Advertising Display Program, and authorize the Mayor or the Mayor�s designee to execute the Agreement attached hereto, with the exhibits on file with the Clerk of the Board.

SCOPE
Miami International Airport (MIA) is located primarily within Commissioner Rebeca Sosa�s District Six; however, this item has a countywide impact in that MIA is a regional asset.

DELEGATED AUTHORITY
In accordance with Miami-Dade County Code Section 2-8.3 related to identifying delegation of Board authority contained within the subject agreement, the Miami-Dade Aviation Department (MDAD) Director or his designee has the authority to exercise the renewal options and to terminate the agreement.

FISCAL IMPACT/FUNDING SOURCE
This project generates revenue for MDAD. Payment provisions include a Minimum Annual Guarantee (MAG) of four million five hundred thousand dollars ($4,500,000), or a percentage fee of 65 percent (65%) of gross revenues, whichever is greater, and annual rent for support space. The concessionaire shall also pay a construction permit fee of one percent of the estimated construction costs for improvements.

TRACK RECORD/MONITOR
Clear Channel Airports does not have a current contract with Miami-Dade County. The project will be monitored by MDAD Property Manager Sarah Abate.

The Department of Building and Neighborhood Compliance has issued a warning notice to Clear Channel, alleging that three Off-Site Class C billboards are not in conformance with the County Sign Ordinance. No citations have been issued related to these three signs. Clear Channel, in response to the warning, has indicated that it believes that it has valid defenses to liability under the County Sign Ordinance. This matter remains pending.

COMPLIANCE DATA
There is no history of violations for this firm in the Small Business Development Department�s database.

MANAGER'S BACKGROUND
BACKGROUND
The RFP for Advertising Display Program was advertised on November 6, 2007, for qualified firms to propose for the opportunity to finance, design, develop, furnish, install, manage and operate an advertising display program at Miami International Airport. Proposals were received from three firms, JCDecaux Airport, Inc., Clear Channel Airports, and Eye Fly Miami (MIA) LLC. MDAD currently has a contract in place for advertising services with JCDecaux Airport, Inc., who has operated at the Miami International Airport since 1994.

The selection committee was comprised of the following five voting members: two MDAD staff members, one staff member from the Small Business Development Department, one staff member from the Government Information Center, and the Vice President of Marketing & Tourism at the Greater Miami Convention & Visitors Bureau. The committee met on July 2, 2008, reviewed proposals submitted in response to the RFP, and heard presentations from the submitting firms.

The selection process consisted of two parts, technical and price. Following presentations of the technical proposals, they were ranked. The sealed price envelopes were then opened and read aloud. The MDAD contracting officer proceeded to apply the formula for calculation of the price score, as provided in the RFP, and determined an overall ranking based on technical and price combined for each proposer respectively.

The overall ranking is as follows:

Proposer Price (MAG) Percentage Fee Adjusted Score Overall Committee Ranking
JC DECAUX AIRPORT, INC. 5,100,000 65% 4725 1

CLEAR CHANNEL AIRPORTS 3,900,000 65% 4610 2

EYE FLY MIAMI (MIA) LLC 3,500,000 60% (average) 4445 3

At the conclusion of the public hearing meetings, the selection committee recommended that the highest-ranked responsive and responsible firm, JCDecaux Airport, Inc. (JCDecaux), be forwarded to the County Manager for approval and authorization to negotiate an agreement. In a memo dated August 4, 2008, the County Manager appointed a negotiation committee and authorized negotiation with JCDecaux Airport, Inc.

The negotiation committee met with JCDecaux on August 14, 2008, and on September 9, 2008, successfully reached agreement. However, on November 14, 2008, JCDecaux advised the contracting officer that, due to dramatic then-current economic conditions that altered its short- and medium-term prospects for revenue growth at MIA, JCDecaux desired to lower its offered MAG to $4 million. MDAD responded it intended to move forward with the agreement as negotiated, whereupon JCDecaux requested further negotiations. The Negotiation Committee, through the Chairperson, indicated that a request for the twenty percent (20%) reduction on the MAG could not be accepted at this time. Research indicated that the airport advertising sector would not be down considerably during the year 2009-2010. Furthermore, the Chairperson advised that the solicitation process had to be re-opened and the other proposers would have to be invited to negotiate, if JCDecaux insists on the lower MAG. Following that meeting, the negotiating committee declared an impasse and proceeded to negotiate sequentially with the remaining two firms, which proved unsuccessful.

Subsequently, Clear Channel Airports requested to continue negotiations as internal management changes had occurred that allowed them now to reconsider terms upon which they could not previously agree. Negotiations were re-opened based on the original ranking order with negotiations beginning with JCDecaux.

The negotiation committee met with JCDecaux on September 2, 2009. JCDecaux made an offer of $4,000,000 MAG for the first four years, and also requested that the CPI be excluded. JCDecaux further requested that the term of the agreement be bifurcated into two periods - four years (initially), followed by eight years. JCDecaux further proposed that the terms of the Agreement for the latter (8 years) be negotiated at the end of the initial 4-year term. After discussions between JCDecaux and the Committee, the Committee agreed it could not accept JCDecaux�s offer because it was not in the best interest of the County. The Committee adopted a motion to reject JCDecaux�s offer and invite Clear Channel Airports to negotiate.

The negotiation committee met with Clear Channel on September 17, 2009. The Chair gave an overview of the expectations, discussed the economic downturns, and the HSBC contract. Clear Channel Airports explained they requested to re-open negotiations due to the merger between Clear Channel Airports and Interspace. Clear Channel Airports offered an increase to its original MAG of $3,900,000 MAG to $4,200,000 and the 65 percent to stay as proposed. The Chair made a counter offer of $4,700,000, with a cap or deferral of the CPI for the first two years and, if HSBC does not renew their contract, a return to $3,900,000 plus any escalation. Clear Channel Airports requested some form of relief from traffic decline.

The negotiation committee met with Clear Channel Airports on October 8, 2009. The Committee and Clear Channel Airports went page by page of the Agreement with discussions, questions, and modifications. Clear Channel Airport increased the MAG from $4,200,000 to $4,500,000.

PROJECT: Advertising Display Program

PROJECT NO.: RFP No. MDAD-05-06

PROJECT LOCATION: Miami International Airport

COMPANY NAME: Clear Channel Outdoor, Inc. d/b/a Clear Channel Airports

TERM OF AGREEMENT: The term of this agreement is for 10 years starting on the effective date of this Agreement.

OPTION(S) TO RENEW: At the sole discretion of MDAD, the initial 10-year term may be extended for a maximum of one two-year term, provided the extension is mutually agreed to by both parties in writing.

COMPANY PRINCIPALS: J. Michael Riley, President

GENDER, ETHNICITY &
OWNERSHIP BREAKDOWN: Caucasian-Male

COMPANY LOCATION: 600 W. Chicago Avenue, Suite 600 Chicago, IL. 60610

HOW LONG IN BUSINESS: 33 years

PREVIOUS AGREEMENTS
WITH THE COUNTY WITHIN
THE PAST FIVE (5) YEARS: None

CONTRACT MEASURE: The goal established is 11% Airport Concession Disadvantaged Business Enterprise (ACDBE) Program.

CONTRACT MEASURE
ACHIEVED: 11%

ACDBEs: Saul Signs, Inc., 11%- $495,000.00

ADVERTISEMENT DATE: November 6, 2007

LIVING WAGE: Not Applicable

USING DEPARTMENT: Miami-Dade Aviation Department

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Assistant County Manager