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Turbulence Over HABDI

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Even with all of HABDI's current problems, the project may still be a success. But these recent, largely unnecessary complications bolster critics of the county commission and its decision to turn over such a valuable piece of property to a group that has little experience in airport development. HABDI's flounderings should be particularly worrisome to Mayor Alex Penelas and Commissioner Natacha Millan, since they were two of the group's strongest supporters. And as more details emerge regarding the development's struggles to get going, that criticism is likely to grow.

When I first approached Rudd and told him what I had learned about the conflicts within HABDI, he was upset. But his anger quickly passed, and he seemed eager to move out from Herrera's shadow and tell someone of his role in the origins of the development. Rudd is something of the forgotten man within HABDI, with most people believing the concept was Herrera's idea. "I am the creator," Rudd says. "After Hurricane Andrew I went to the base. While others saw destruction, ruination, and devastation, I was looking at it saying, 'Well we now have an opportunity to bring it back.'"

Rudd knew, however, that the project would require more financial backing than he personally was capable of providing. So he contacted Virgilio Perez, who in turn brought in Herrera and Jaime. At that point the four men were equal partners. "As capital requirements began to expand, then of course the respective positions had to be modified," he adds.

Rudd won't comment on the specific numbers involved, but sources familiar with the deal say that Herrera and Jaime each initially put in $600,000, and that under the original shareholders' agreement Herrera and Jaime were each given 40 percent of the company, while Rudd and Perez received a 10 percent stake apiece. Rudd says he could line up the tenants once Herrera and Jaime secured the lease. "The other fellows had to fund the project with lawyers and whatever needs to be done," he said. "They had to get the lease. I am not a wealthy man. But I had the experience, I had the vision, I had everything. I put it all together. But I didn't have a big pocketbook, I didn't have the connections with the commissioners."

Although it had been widely speculated in the press throughout 1995 that developer Pedro Adrian was a partner in HABDI, the truth of the matter, according to current board members, is that he did not commit himself to the project until January 9, 1996 -- the night before the county commission was scheduled to vote to approve the deal. Although Herrera and Jaime's pockets may have been deeper than Rudd's, they were not deep enough to satisfy the requirements imposed by the county commission that HABDI's partners have at least eight million dollars in ready cash to put into the project. Herrera and Jaime needed Adrian, and following a tense negotiating session between the three men, Adrian finally agreed to join the group.

Still unsure that he would have the necessary votes during that January 10, 1996, commission meeting, Herrera wanted to impress the board with yet another surprise investor. Just minutes before the board convened, HABDI announced that it had added as a partner American Logistics Services Inc. (ALS), which was owned in part by the giant defense contractor Raytheon Corp. Word that Raytheon had joined forces with HABDI gave Herrera's group an air of legitimacy, and several commissioners cited the multibillion-dollar company's involvement as being one of the most positive signs of HABDI's ability to see this project through.

With its new partners, HABDI ownership was divided among seven individuals and one corporation. Herrera and Jaime each now owned 23.6 percent of the company; Rudd and Perez controlled 5.9 percent apiece; Adrian assumed 20 percent of the business; Manny Romero and Augustine Ajagbe (added before the commission meeting to give HABDI's board the appearance of having South Dade and black representation, respectively) each were given 3 percent shares; and ALS now held a 15 percent stake.

HABDI's cohesion was short-lived, as it did not take long before the group's infighting began. In March 1996 Herrera announced the first cash call for stockholders -- one million dollars. Each stockholder had to pay a portion of that sum based on his ownership interest in HABDI. But according to sources familiar with HABDI's finances, Jaime, who under the cash call owed $236,000, and Perez, who owed $59,000, had trouble making their payments. It soon became clear that Perez would not be able to keep up with HABDI's demands for money. But Perez did not leave the group quietly. Sources say he threatened to sue HABDI for his time and effort in the project, and a settlement was reached last summer whereby Perez was given $160,000. Perez refused to comment for this story.

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Jim DeFede
Contact: Jim DeFede