By Kyle Munzenrieder
By Kyle Munzenrieder
By Terrence McCoy
By Jeff Weinberger
By Ryan Yousefi
By Chuck Strouse
By Terrence McCoy
By Terrence McCoy
What had been very tentative discussions suddenly became an all-out push to secure an agreement with American Logistics. Just 24 hours before the commission meeting, ALS signed a general agreement with HABDI to become a partner in the Homestead air base proposal. But so preliminary was the agreement that officials from HABDI, ALS, and Raytheon were still negotiating details during the car ride to the commission meeting in South Dade.
This frantic maneuvering was not revealed to commissioners. Rather, when HABDI announced that ALS would be a partner (and mentioned several times that ALS was a subsidiary of Raytheon), the dais buzzed with excitement. Maurice Ferre even chided HABDI for not making commissioners aware sooner of this major development.
But Raytheon may not be the corporate white knight some commissioners were hoping for. In fact, the extent of ALS's involvement was never even discussed at the meeting. According to sources familiar with the agreement, ALS has only consented to invest between $200,000 and $300,000 in the project -- a pittance in light of HABDI's estimate that $187 million will have to be spent in the next fifteen years for the development to be successful.
Of the 90 minutes HABDI spent making its presentation to the commission, just 10 were devoted to the most intriguing question about that $187 million -- where would it come from? HABDI's financial consultant, Howard Gary (who was Miami city manager when Ferre was mayor), explained that ownership of the project will be divided among three groups:
Hispanics will control 51 percent and will need to raise $15.3 million, principally from Herrera, Jaime, and Adrian.
African Americans will have an opportunity to own 25 percent by coming up with an investment of $7.5 million.
Residents of South Dade will be offered up to 24 percent of the project for $7.2 million.
That adds up to $30 million in cash, which would then be used to borrow or leverage another $90 million, for a total of $120 million. The remaining $67 million, Gary explained, would come from a combination of state and federal grants, revenue bonds, and from money generated by the airport itself once it is open for business.
Gary said he believes the Hispanic investors have more than enough cash to meet their commitment of $15.3 million and claimed that Herrera and Jaime have a combined net worth in excess of $50 million. (He did not provide any information about Adrian's net worth.)
However, Gary did not make any guarantees regarding the $14.7 million needed from South Dade residents and blacks, though he did say that HABDI officials would first try to raise money from South Florida blacks before looking throughout the state or around the nation for interested investors.
How quickly HABDI will need to raise this initial $30 million in cash is not clear. The only requirements are that within 90 days of signing the lease, HABDI must deposit in an escrow account $8.24 million in cash and that during the first seven years they must spend a total of $16 million for improvements to the base.
Critics of the plan, including attorney George Knox, the lobbyist hired by South Dade residents to argue their case, say that HABDI's initial cash investment is too small to warrant granting them control over such a valuable piece of public real estate. The Federal Aviation Administration, which must approve the lease, has expressed the same concern but is withholding judgment until the agreement has been concluded.
Gary was unmoved by such misgivings, and in closing offered this endorsement: "I've taken the lease to Wall Street and they've told me it is financeable."
When commissioners had a chance to ask questions, Bruce Kaplan jumped on Gary's final statement about Wall Street, suggesting it was exceedingly vague. "'Take it to Wall Street,'" Kaplan scoffed. "It gives it a sense of confidence but what does it really mean?" Eventually Gary acknowledged that HABDI and the proposed lease in fact had no commitments of any sort from anyone on Wall Street.
HABDI officials also faced tough questioning regarding their marketing strategy. Several times during its presentation, the group's chief aviation consultant, Richard "Dick" Judy, Dade County's former embattled aviation director, talked about signing up various small commercial carriers to fly in and out of the base.
"Like which carriers?" Kaplan asked.
"I don't think that's appropriate at this time," Judy said, allowing that he would be willing to tell the manager privately.
"Well, the manager is not voting on this," Kaplan shot back. "We are. And I would very much like to know what your plans are -- concretely, specifically. Who is going to fill the voids?"
Judy thought about it for a moment. "Well, I must say to you," he began, "we do not have air carriers lined up to begin using this new airport. We've been concentrating on the lease." He added that the commission "has to have some trust" in HABDI's ability to find tenants.
"We've heard that before," Kaplan groaned. The commissioner then argued that Miami International Airport still has an abundance of maintenance and cargo space left over from the demise of Eastern and Pan American airlines. "Who do you envision occupying the maintenance space?" Kaplan asked again.