Very Big Bucks

The most lucrative contract in the history of Miami International Airport is about to be awarded to one lucky company

"In the future," Teele adds, "we've got to be a little bit more sophisticated in our approach."

Though the duty-free conventioneers did not know it at the time, the real kicker to Dade's tortured search for a new airport vendor was yet to come. After all the politicians' grousing and complaining about how Greyhound Leisure Services had unfairly monopolized the contract for decades, and how a new company was essential if MIA were to boast a world-class duty-free operation, county commissioners are now poised to award a ten-year contract to none other than Greyhound Leisure Services.

County Manager Armando Vidal has recommended Greyhound, and the final decision will be made at next Tuesday's county commission meeting. But the battle is far from over. At last count more than 40 people had registered to lobby commissioners on the issue -- no surprise given what's at stake. During the course of the ten-year contract, gross sales at the duty-free shops are expected to top $700 million, making it the largest single contract in the airport's history.

"I can tell you that everyone in the industry is watching this process with absolute amazement," says Doug Newhouse, news editor of the London-based trade magazine Duty Free News International.

Industry insiders are not the only ones amazed. Even certain county commissioners seem a bit confused at how the selection process could have gotten so turned around that they have ended up right back where they started A with Greyhound in the driver's seat.

The first duty-free shop at Miami International Airport wasn't really a shop at all but rather a simple card table, set up by a World War II pilot named Capt. Ed Mehrige. After the war, Mehrige flew as a pilot for Pan Am out of Miami. In 1958 he signed a contract with the county that allowed him to set up his card table in the terminal building and sell cartons of cigarettes to outbound passengers on international flights. Steadily his business grew, and in 1968, Greyhound Leisure Services, a subsidiary of the Greyhound bus line, bought out Mehrige and inherited the airport contract. During that decade of growth, the business became far more sophisticated -- and profitable.

Duty-free shops are unique at the airport. Operators such as Greyhound can import and sell a variety of merchandise without paying state and federal taxes or import duties because -- in theory at least -- the goods never enter the U.S. market. They are sold only to airline passengers whose destinations lie outside the United States. This results in savings to the customer of up to 30 percent. Tobacco products, liquor, jewelry, and perfumes are favorites among duty-free operators, whose customers make their selections from display samples but don't actually receive the merchandise until they are about to board their international flight.

During most of Greyhound's tenure, the aviation director for Dade County was Dick Judy, who ran the airport with unprecedented autonomy and personal authority. On those occasions when the contract was about to expire (the last time was in November 1985), Judy would simply recommend to the county commission that it be extended, and commissioners historically acceded to Judy's wishes. Moreover, Steve Clark, who was county mayor during much of that time, was a champion of Greyhound's interests.

With their extended contract due to expire again this November, Greyhound executives reached an agreement early last year with members of the county airport staff whereby the company would take on three minority partners in return for an extension of the company's contract into the year 1998.

As they had in the past, Greyhound officials were relying on the ability of the aviation director to push the proposed agreement through the commission with little notice or fanfare. But Dick Judy was no longer aviation director, and Steve Clark was gone from the commission. Instead the job of campaigning for Greyhound's extension fell to the current aviation director, Gary Dellapa, who has displayed none of Judy's desire or ability to finesse such a deal.

Greyhound's plan went before the county commission's aviation committee on February 22, 1994. Feeling confident, and expecting quick approval, Greyhound's president, J.P. Miquel, strode to the podium and outlined the agreement for commissioners. "About a year ago we were approached by the staff at the airport," Miquel began. "They were asking us to take on some minorities in our business, and we accepted." In return, Miquel explained, he wanted the contract extended again.

Whether or not he intended it to sound like a threat, Miquel's presentation seemed to be received that way by certain commissioners. Natacha Millan in particular appeared to be confounded. "Does that mean, sir, you have not been giving anything to minorities?" she asked. "You're going to start now?"

"That is correct, ma'am," Miquel replied. "It's never been requested or asked for from us [to include minorities]."

The committee chambers fell silent.
"Well," committee chairman Pedro Reboredo finally said, "does anybody wish to say something?"

"I have some serious problems with that statement," Millan responded.
Sensing disaster, one of Greyhound's lobbyists, prominent Miami attorney Hank Adorno, rushed to Miquel's side and gently nudged the diminutive Frenchman away from the microphone. Adorno then began furiously backpedaling. Miquel had misunderstood the question, he said. There was some sort of communication problem. Greyhound really was a good corporate citizen. "Their heart is in the right place," Adorno pleaded. But it was too late. The issue was dead. There would be no three-year extension.

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