Stalled Airport Project May Lead to Suit Against Miami-Dade
Contractor Odebrecht USA has stated that it may sue Miami-Dade County, which runs Miami International Airport, for long delays in planned upgrades to the MIA airport. The city has been planning new commercial development around the airport for six years, but nothing has gotten off the ground. The contractor feels that it has been misled by the city over the years and has wasted millions of dollars in pursuing the project, which was dubbed “Airport City.”
Odebrecht is contemplating suing the city for some of the money that it has spent in order to develop the land. The contractor is upset because the project apparently has become enmeshed with county politics. The contractor has spent $11 million since 2008 on the project.
Back in 2008, the city announced that it was interested in a public-private partnership in order to help Miami International Airport generate revenue for the city. The city invited construction contractors to suggest ideas for the airport.
The original “Airport City” was to be 33 acres and contain a conference center, offices, and retail space. This past January it was downsized to nine acres, including only retail and hotel space. Under the original design, the city was going to earn over $500 million in revenue over the next 50 years.
The last part of the venture involved building a hotel on airport land. The contractor would build and manage the hotel and pay rent to the city for the use of the land. However, in June 2014, Miami notified the contractor that it may not go through with the airport hotel deal. However, this contradicts a March 2014 agreement between the city and the contractor that would allow the contractor to build the hotel and pay rent to the city.
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Cuban Exile Politics
Interestingly, Cuban exile politics may be playing a role in the fate of this business matter. The contractor, a Brazilian-based company, has a separate subsidiary that works in Cuba. Some Cuban-Americans have pushed to have this company, and others who work in Cuba via international subsidiaries, barred from government contracts. In fact, two years ago Cuban-Americans lobbied to have companies who have affiliates that work in Cuba, like Odebrecht, obtain government contracts. However, this law was struck down as unconstitutional.
Changed Economic Outlook
In addition to the political hurdles in providing a government contract to a company with ties to Cuba, the changes in the economic landscape since 2008 may explain why the city is less enthusiastic about the development of Airport City. In 2008, the city was more interested in generating cash as tax receipts were falling and property values started to drop. Now, in 2014, the market is less chaotic, permitting the city, while it may be cash-strapped nonetheless, to consider alternative options for land development. The airport’s property may be better used for airport expansion or other uses rather than straight commercial development.
Contact with Experienced Miami Business Attorney
For help in understanding how business investments and other parts of business law in Miami work, contact the legal counselors at the Campbell Law Group. We can answer any questions you may have about business law, and offer our litigation services if you so choose.