Is This Any Way to Run an Airport?

After years of flying first class, politicos and lobbyists are now having their baggage inspected -- by federal agents

Dellapa's action, however, did not put an end to the controversy. The matter flared again two weeks ago, this time before the commission's community affairs committee. Phillip Bradley appeared before the committee on behalf of Air Terminaling to argue against Dellapa's decision. Bradley asserted that the bidding process should be open to all interested companies, regardless of potential conflicts, and that commissioners themselves should decide who will run the airport's fuel farm. Alex Penelas, the only commissioner attending the meeting, said he tended to agree with Bradley, adding that perhaps the contract should be open to all qualified parties, regardless of their affiliations.

That was Penelas's last meeting as chairman of the community affairs committee. This past Thursday his committee assignment was changed and Commissioner Pedro Reboredo was made chairman of a new aviation committee, which will deal exclusively with the airport. The recently expanded county commission was scheduled to meet Tuesday, April 27, to decide what qualifications will be required of companies wishing to submit bids for the fuel-farm contract.

Although Sirgany Enterprises has been doing business at Miami International Airport since the 1950s, only in the last four years have the company's fortunes soared. Prior to 1989 the Miami-based firm ran six gift shops at MIA and generated about six million dollars per year in sales. Today Sirgany manages 26 retail outlets at the airport, and in the coming year it is expected to amass sales of more than $32 million.

Sirgany operates the airport's three so-called Florida shops, which sell gifts unique to the state, such as crates of oranges and stone crabs packed in dry ice. The company also manages six regular gift shops, including a sports clothing store and a high-priced novelty emporium. Most important, though, Sirgany runs MIA's seventeen newsstands.

The newsstand management agreement, which Sirgany won this past October, was the company's greatest coup, a virtually risk-free opportunity to make money. Dade County owns the newsstands (which produce about $20 million per year in sales); pays for their maintenance and utilities; and purchases and stores all the books, publications, and souvenirs that line their shelves. The county even pays the salaries of the workers who man the cash registers. (Those wages, however, are set by Sirgany.) Sirgany is required only to order the inventory and supervise the newsstands and work staff. For this the county pays the company a flat fee of $300,000 annually. In addition the firm is allowed to keep a fraction of gross sales, which generates another estimated $225,000 annually. Over the span of Sirgany's ten-year contract, the company is expected to reap nearly six million dollars, a hefty percentage of that being profit.

The highly lucrative MIA newsstand contract represented a comeback of sorts for Sirgany. Just a year earlier, in an effort to expand its newsstand operations at Orlando International Airport, the firm had attempted to qualify as a minority-owned company by entering into a partnership with a black educator. But when the black partner admitted to the Orlando Sentinel that Sirgany officials were providing all of the money and that he wasn't involved in preparing the bid or any of the decisions about merchandise and display, Sirgany was disqualified from bidding.

The company suffered a further defeat just three months later, when it lost a bid to continue operating its two news and gift shops at the airport. "It's inconceivable that old-timers like us were not given some special consideration," Sirgany's president, Raymond Kayal, told the Sentinel.

After its ignominious departure from Orlando, Sirgany concentrated its efforts on Miami, in particular on winning the newsstand management contract, which was soon to be awarded. Sirgany's local contacts were solid. Besides having a long-running if unspectacular history at Miami International Airport, the company employed Christopher Korge as its attorney and lobbyist. Korge, a prominent Miami lawyer, is a confidant of Commissioner Alex Penelas and was active in his successful 1990 election campaign. He also is a friend of Commissioner Larry Hawkins, who once appointed him to the county's charter review committee. Moreover, Hawkins is well acquainted with the founder of Sirgany Enterprises, Mitchell Sirgany. "Mitchell Sirgany has been [at Miami International Airport] since 1953 and is probably one of the most fun guys to listen to about airport lore and history in Dade County," says Hawkins, adding that he and Sirgany have never discussed business during any of their meetings.

If Sirgany faced an obstacle in winning the MIA newsstand agreement, it arose from the qualifications requirements. The original proposal demanded that bidders have a minimum of four years newsstand experience with gross sales of at least five million dollars in any one year. Sirgany qualified on both counts, but just barely in the sales category. In addition, the company operated only two newsstand/gift shops in Orlando A not a very impressive resume. (And not to mention that Sirgany would soon lose those contracts.)

But by late 1991, when MIA's newsstand proposal went to the county commission for final approval, the minimum qualifications had been subtly altered in a way that boosted Sirgany's chances. Instead of limiting business experience to newsstands alone, the new language permitted either newsstand experience or comparable gift-shop experience. Now Sirgany could say its qualifications included the two Orlando operations and the six gift shops it ran at Miami International Airport. In addition, its gross sales figures now ran comfortably above the five-million-dollar minimum.

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