Miami-Dade Legislative Item
File Number: 171456
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File Number: 171456 File Type: Resolution Status: In Committee
Version: 0 Reference: Control: Economic Development and Tourism Committee
File Name: CONCESSION AGREEMENTS AT MIA Introduced: 6/2/2017
Requester: NONE Cost: Final Action:
Agenda Date: Agenda Item Number: 11A
Notes: Title: RESOLUTION RELATING TO LEASE AND CONCESSION AGREEMENTS AT MIAMI INTERNATIONAL AIRPORT; ESTABLISHING THE POLICY OF THE COUNTY WITH RESPECT TO CLAIMS BY CONCESSIONAIRES; DIRECTING THE COUNTY MAYOR OR COUNTY MAYOR’S DESIGNEE TO INCLUDE LANGUAGE IN LEASE AND CONCESSION AGREEMENTS INFORMING CONCESSIONAIRES OF THE COUNTY’S POLICY; DIRECTING THE COUNTY MAYOR OR COUNTY MAYOR’S DESIGNEE TO UTILIZE THE OFFICE OF THE INSPECTOR GENERAL AND THE AUDIT AND MANAGEMENT SERVICES DEPARTMENT TO DETERMINE THE VALIDITY OF CONCESSIONAIRE CLAIMS; AND DIRECTING THE COUNTY MAYOR OR COUNTY MAYOR’S DESIGNEE TO MINIMIZE IMPACTS TO AIRPORT CONCESSIONAIRES, WHERE POSSIBLE, ARISING OUT OF AIRPORT CONSTRUCTION
Indexes: MIAMI INTERNATIONAL AIRPORT
  CONCESSION AGREEMENTS
Sponsors: Rebeca Sosa, Prime Sponsor
Sunset Provision: No Effective Date: Expiration Date:
Registered Lobbyist: None Listed


Legislative History

Acting Body Date Agenda Item Action Sent To Due Date Returned Pass/Fail

Economic Development and Tourism Committee 6/15/2017 2F Deferred P

Office of the Chairperson 6/13/2017 Deferrals
REPORT: The Prime Sponsor is requesting deferral of this item to no date certain

County Attorney 6/2/2017 Referred Economic Development and Tourism Committee 6/15/2017

County Attorney 6/2/2017 Assigned David M. Murray 6/5/2017

Legislative Text


TITLE
RESOLUTION RELATING TO LEASE AND CONCESSION AGREEMENTS AT MIAMI INTERNATIONAL AIRPORT; ESTABLISHING THE POLICY OF THE COUNTY WITH RESPECT TO CLAIMS BY CONCESSIONAIRES; DIRECTING THE COUNTY MAYOR OR COUNTY MAYOR’S DESIGNEE TO INCLUDE LANGUAGE IN LEASE AND CONCESSION AGREEMENTS INFORMING CONCESSIONAIRES OF THE COUNTY’S POLICY; DIRECTING THE COUNTY MAYOR OR COUNTY MAYOR’S DESIGNEE TO UTILIZE THE OFFICE OF THE INSPECTOR GENERAL AND THE AUDIT AND MANAGEMENT SERVICES DEPARTMENT TO DETERMINE THE VALIDITY OF CONCESSIONAIRE CLAIMS; AND DIRECTING THE COUNTY MAYOR OR COUNTY MAYOR’S DESIGNEE TO MINIMIZE IMPACTS TO AIRPORT CONCESSIONAIRES, WHERE POSSIBLE, ARISING OUT OF AIRPORT CONSTRUCTION

BODY
WHEREAS, Miami International Airport (MIA) supports nearly one in every four jobs in Miami-Dade County; and
WHEREAS, MIA is entirely self-sustaining, generating its own revenues through leases, concessions, and through payments by airlines; and
WHEREAS, passenger traffic at MIA is substantially in excess of what it was projected to be in 2007, as the past decade has seen unprecedented growth in passenger volumes at MIA; and
WHEREAS, for many of these passengers, MIA is their first experience with the County’s diverse culture and people, and is critical to shaping their perception; and
WHEREAS, the concessions program at MIA generates more revenue per passenger than all but one other United States airport, and has been successful at driving revenues to MIA so that airline costs can be kept down; and
WHEREAS, the vast majority of these concessions were awarded following a robust competitive process, on the recommendation of Miami-Dade Aviation Department’s (MDAD) professional procurement staff; and
WHEREAS, these competitive procurements resulted in concession program that is award winning, and which provides numerous diverse shopping and dining options to travelers, including numerous locally branded and owned options; and
WHEREAS, despite record passenger numbers, industry leading sales per passenger, and high customer satisfaction, existing concessionaires at MIA are now asserting that they are or have suffered business losses which entitle them to compensation, and have demanded additional concessions locations, extended lease terms, and/or reductions in payments to MDAD as a result of, variously, MDAD construction, changes in airline operations or locations, or changes in general local business conditions; and
WHEREAS, these concessions are private companies, who knowingly and willingly choose to operate at MIA; and
WHEREAS, private companies are always exposed to business risks from adjacent third-party construction, changes in market conditions, or changes in customer tastes; and
WHEREAS, the County does not insure private companies against business losses, or guarantee that private companies will realize any level of profit; and
WHEREAS, a reduction in revenues paid by concessionaires means that the airlines making use of MIA must make up for those lost revenues via additional payments to MDAD; and
WHEREAS, concession space at MIA is a rare commodity that should be allocated to those firms who demonstrate their entitlement through their success in an open, competitive process; and
WHEREAS, extending lease terms, or giving new concession locations to existing vendors without a competitive process eliminates opportunities for new entrants, including local companies, to compete for airport concession locations; and
WHEREAS, it is the firm belief that competitive processes best ensure that the concession program at MIA remains of the highest quality, and provides the best financial return to the MDAD, and that it is not the role of government to hand-pick the winners and losers of the MIA concession program,
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMI-DADE COUNTY, FLORIDA, that:
Section 1. It is the established as the policy of this Board that the County should not provide relief to concessionaires at MIA, such as additional concession locations, extended term, or reductions in payments to the County. Where concessions cannot or will not abide by the terms of their agreements, the County should terminate such agreements, for either cause or convenience, and engage in a competitive process to select a replacement concessionaire. The Board reaffirms its policy that concession locations and payments are to be awarded via competitive processes, and that firms which win such processes should be expected to abide by the terms of those agreements.
Section 2. The County Mayor and County Mayor’s designee shall not settle or resolve any claim by any concessionaire by providing a concessionaire new locations, extending the term of the concession, or reducing the payment obligations of that concessionaire without the prior consent of this Board, which consent shall only be granted via two-thirds vote of the members of this Board. This directive supersedes any prior grant of authority to the County Mayor with respect to the settlement or resolution of concessionaire claims at MIA in any prior Resolution of this Board. Nothing herein shall limit the ability of the County Mayor or County Mayor’s designee to resolve any claim via the issuance of rental credits to a concessionaire in accordance with section 2-286.1 of the Miami-Dade County Code.
Section 3. The County Mayor or County Mayor’s designee shall, prior to seeking this Board’s consent to the settlement or resolution of any claim by a concessionaire, refer such claim to the Office of the Inspector General and also the Audit and Management Services Department. Any concessionaire seeking relief shall be required to certify their claim pursuant to Section 21-255 of the Miami-Dade County Code, as may be amended from time to time, and shall be required to cooperate in any audit or financial review by producing all financial records and supporting documentation which, in the sole judgement of the reviewing agencies, OIG and AMS, are needed to assess the validity of the claim. The County Mayor or County Mayor’s designee shall attach the results of such referral to all items presented to this Board seeking this Board’s consent to a settlement or resolution of such claims. Such item shall additionally contain specific findings of fact by the County Mayor or County Mayor’s designee as to why such settlement or resolution is necessary, and why termination of the concession and reprocurement is not an appropriate alternative.
Section 4. The County Mayor or County Mayor’s designee is directed to work with the County Attorney’s Office to develop any contract language as may be needed to effectuate the terms of this resolution, and shall include such language in all future concession agreements.
Section 5. The County Mayor or County Mayor’s designee is directed to minimize disruptions, where possible, to concessionaires which may occur as a result of construction at MIA. The County Mayor or County Mayor’s designee is directed to work with the County Attorney’s Office to develop language for concession agreements which provides a mechanism for issuance of rental credits to such concessionaire if construction materially impacts the business of such concessionaire. Such language must also at the same time, however, recognize that concessionaires working in a dynamic airport environment will always be subject to disruptions and disturbances by airport construction, changing passenger volumes, changing airline schedules and destinations, and other factors, and that concessionaires who voluntarily chose to work in the Airport must bear the business risk associated with such issues.
Section 6. Nothing herein shall limit the power of this Board of County Commissioners to alter or amend any concession agreement in any manner, in the discretion of the Board. Nothing herein shall limit the discretion of the Board of County Commissioners in determining the circumstances in which settlement or resolution of a claim by a Concessionaire is appropriate, or to settle or resolve any Concessionaire claim, including settlements or resolutions which provide new concession locations, extend term, or waive or alter the payment obligations of an agreement.
Section 7. The provisions of this Resolution may be waived by majority vote of the Board of County Commissioners.



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