Dolphins owner among real estate heavy-hitters vying for Miami airport hotel contract

After over 60 uncontested years, the Miami International Airport Hotel that connects to Terminal E probably won’t be the only hotel at the airport for much longer.

Two developers are competing to secure a 50-year lease from the county to build a new hotel connected to the airport. After months of uncertainty, FDR Miami Hotel LLC and Parmco Airport Hospitality LLC await a decision on who will secure the contract.

The selected firm will be responsible for “the design, build, financing, operation and maintenance” of the new hotel, memos from Miami-Dade Mayor Daniella Levine Cava state. FDR’s proposed total budget is around $265 million, and Parmco’s is around $241.7 million.

In an April memo in which she recommended FDR’s proposal, Levine Cava stated the hotel would generate $240 million in revenue for the county over the course of the lease. Miami-Dade County would lease the land, and under FDR’s proposal, the memo stated, the county would receive over $20 million in rent over the 50-year term.

FDR is a joint venture of Fontainebleau Development LLC, the firm chaired by Jeffrey Soffer that owns the Fontainebleau Miami Beach hotel, and The Related Companies, which is chaired by Miami Dolphins owner Stephen Ross and headquartered in New York.

Parmco is a Miami-based development firm created for the purpose of this project. Les Melcher, one of Parmco’s partners, is the former president of the Dallas-based Woodbine Development Corporation, which developed the Grand Hyatt at Dallas Fort Worth International Airport.

The county posted the first phase of its request for proposals in September 2020. The new hotel complex would be located on a lot of about 1.8 acres on the northeast side of the airport and connect to Terminal D through a pedestrian bridge. The proposed lot is next to the Dolphin parking garage.

Start, stop and restart

Last December, Levine Cava issued a memo that rejected all proposals and asked the county to start the process again “with a stronger focus on workers, local hiring, the environment and community benefits.”

On April 7, the mayor rescinded that rejection in a memo in order to proceed “expeditiously.” Levine Cava cited the airport’s growth and economic importance, as well as its need for “a new, world-class airport hotel” as reasons to proceed quickly. On April 10, the mayor issued a memo recommending FDR.

“FDR has negotiated a development agreement with the county and looks forward to the County Commission’s favorable consideration,” according to a statement the firm shared with the Herald. FDR scored substantially higher than Parmco in its evaluations from the county selection committee.

On June 14, FDR and Parmco presented to the county commission’s Aviation and Economic Development Committee, which did not recommend either proposal to the commission. The commission is expected to make its decision on July 18.

County officials and real estate developers alike agree that Miami’s airport needs a new hotel. There already is a hotel that connects to the airport, but it is over 60 years old. This project will not replace the Miami International Airport Hotel, but it will connect to the airport terminal like the existing hotel does.

Driftwood Hospitality Management, the third-party manager of the Miami International Airport Hotel, declined to comment.

“Is there a need for an airport hotel? Absolutely,” said Gregory Rumpel, the senior managing director for JLL Hotels & Hospitality. “Miami has had a need for that for so long.”

Advantages to being connected to the terminal

Rumpel said airport hotels — particularly airport hotels that connect to the airport itself — attract a variety of customers and are often lucrative. Travelers with long layovers, early morning departures, late night arrivals or canceled flights may stay for a night out of convenience. Business travelers may meet in an airport hotel’s conference center for meetings. Airport hotels also offer a lodging option for tourists coming to Miami to embark on cruise vacations.

Paul Lambert, the manager of Parmco, said people pay a premium for a hotel connected to the airport. He said this premium shows up in room prices and occupancy rates.

With either of the two proposals, Miami’s new airport hotel will have over 400 rooms. Both developers proposed designs with pedestrian access to the airport, convention and meeting spaces, restaurants and other amenities.

If selected, FDR would build a Westin hotel designed by Miami architecture firm Arquitectonica. Parmco would build a Hilton hotel designed by Zyscovich, another Miami-based architect.

Parmco claims it could build a hotel five or six months faster than its competitor because it owns plans from Airport City, a proposed development at the airport that would have included hotels and other amenities, including event centers and hospitals for people coming to Miami for medical tourism. The firm has stated it could complete the project in about three years.

Airport City included plans to revamp the existing airport hotel. Jesse Manzano-Plaza, a lobbyist and political consultant who is on the bidding team, said he expects another airport hotel to be built following this one, but Lambert said he does not necessarily think that will be a revamp of the existing Miami International Airport Hotel.

Zyscovich would have been the architect for the Airport City project, which was never built. Odebrecht, the troubled Brazilian development firm behind Airport City, put millions of dollars into digging and mapping the infrastructure of the airport in anticipation of the project.

Parmco bought the Airport City plans, which Lambert said give firm information about underground utilities and infrastructure that not even the airport itself has. Lambert added that these plans will help expedite the building process for Parmco.

During the county commission’s Aviation and Economic Development Committee meeting, Commissioner Keon Hardemon, who chairs the committee, questioned whether these plans actually give Parmco a competitive advantage.

A representative of FDR pointed to comments from technical consultant to the Miami-Dade Aviation Department Abdel Martel at the committee meeting. Martel stated the county would not allow a firm to start digging based on 10-plus-year-old plans and records.

“The information that we shared [with bidders] was the information we all use as consultants to the airport and is as accurate as it could be,” Martel added.

FDR’s statement to the Herald said its finances are stronger than Parmco’s. FDR claims it could finance the entire project out of pocket if it needed to. A statement from the mayor’s office also noted the “financial certainty” of FDR’s proposal and the fact that FDR’s proposed rent payments to the county were greater than Parmco’s.

The Parmco team said it felt its proposal was hurt by not initially having the opportunity to present but agreed nothing improper happened during the process. Bidders did not present to the selection committee, but they did present to the aviation committee in June.

Years to reach this point

Manzano-Plaza criticized the drawn-out process, which years after the first request for proposals, is still awaiting a final vote. Lambert said Parmco would not be advocating for its proposal unless the firm felt it offers a stronger product.

Rumpel said building a hotel that’s integrated into an airport comes with a unique set of challenges. He said factors like security and airport regulations can complicate and slow the process. He estimates the project would take no less than three years.

“The challenge with an airport is ... there’s the airport side and there’s the public side, and anytime that those interact, there’s a lot of security and safety issues,” Rumpel said. “There’s lots of additional management ... so it’s still a long way off.”