Miami International Airport will keep price protections after mayor reverses course

Miami International Airport will retain price controls after Miami-Dade County leaders reversed course on a request by retailers and restaurants to lift the consumer protections in exchange for paying workers higher wages.

Mayor Daniella Levine Cava, who earlier this year proposed ending the long-standing price caps as part of a COVID-19 relief package, told commissioners her administration wrongly believed MIA was unusual in limiting the prices tenants could charge travelers above what’s charged outside the airport.

In fact, most airports have such controls, the Miami Herald reported Tuesday, a week after a top Levine Cava aide told the board MIA was “one of the few airports in the country” with the rules.

“The previous leadership of the airport had negotiated that part of the deal, [and] advised the administration at the time that competitive pricing was not common,” Levine Cava told commissioners, adding the county has since learned that wasn’t the case. “Based on this new information, we are recommending maintaining competitive pricing.”

The retention of the pricing rules, which cap airport premiums at between 10% and 15% of what travelers would pay elsewhere in Miami, was approved Wednesday as part of a broad extension of retail and restaurant leases at MIA.

A commission committee had previously approved dropping price controls, and Chairman Jose “Pepe” Diaz told Levine Cava he also mistakenly believed Miami was one of the few airports with that kind of consumer protection.

Commissioners approved no-bid extensions of between four and six years. Duty Free stores reliant on the still-lagging international market get the most time and tenants with month-to-month leases well past their original expiration dates get the least. The extensions were longer than Levine Cava’s proposal, which capped extensions at four years.

Commissioners René Garcia, Keon Hardemon, Joe Martinez and Rebeca Sosa voted against the main lease-extension package for most MIA tenants, calling it too generous for businesses that have already gone years without having to bid on their airport locations.

“I think four years is too rich,” said Hardemon, chair of the commission’s Airport and Economic Development Committee. “For those that had month-to-month [leases], it’s downright decadent.”

The deals are the latest in a string of no-bid extensions for major retailers at the county-owned airport, a small industry populated by some reliable donors in county races. Some existing tenants last bid on their locations more than 15 and 20 years ago.

Tenants pushed for more time on their leases in 2021 as a way to regain profits lost during the near shutdown of the airport at the start of the COVID-19 pandemic in March 2020, and accelerate reopening of some locations still shuttered at an airport nearing past peaks in terms of traffic.

In exchange for the longer lease terms and an end to price controls, MIA tenants agreed to immediately implement the airport’s existing living-wage rules, which only kick in once leases are renewed. Unions have pushed for expanding the county’s $17-an-hour living wage throughout the airport.

The new agreements include short-term rent reductions for airport tenants. The ending of price controls was also pitched as financial relief, since it would allow for higher prices as MIA worker wages increase from Florida’s minimum wage of $10.

Airport tenants generated about $450 million in sales in 2019, and those revenues are down about 50% as air traffic nears pre-pandemic levels. Tenants said that while overall traffic is looking better, MIA still lacks the normal flow of heavy-spending international travelers.

“The mayor insisted we go to a living wage,” Newslink owner Chris Korge told commissioners. “We’re raising our wages and benefits by 40%. How do you think we’re going to pay for this?”