Construction

Odebrecht USA — a master at winning public contracts — has run into roadblocks in its quest to build Airport City

 

Odebrecht in the United States

    Odebrecht USA: Headquartered in Coral Gables with offices in Houston and New Orleans. The construction company has built many public works projects in Miami-Dade County, bridges throughout Florida, highways in Texas, California, South Carolina, North Carolina and Florida, the Seven Oaks Dam in California and new water pumping stations and fortified levees in New Orleans.

Ongoing Florida projects:

• Miami International Airport North Terminal (Final phase — the baggage handling system that will connect with North Terminal international arrivals — is scheduled to be completed in February.)

• Wharf-strengthening at PortMiami in preparation for deepening the shipping channel. As a prelude, 185 corals were relocated to a more suitable environment.

• Widening of SR 8360I-385 near Biscayne Bay

• Embankment, wall and drainage work for new south runway at Fort Lauderdale-Hollywood International Airport and development of navigational aids infrastructure.

• Rehabilitation of the Herbert Hoover Dike surrounding Lake Okeechobee (replacement of two culverts near Moore Haven) for the Army Corps of Engineers

• Working on preparing bids for $2.8 billion worth of FDOT projects

Braskem America: Headquartered in Philadelphia, it is the leading producer of polypropylene in the United States and has five U.S. production plants. Subsidiary of Odebrecht’s Braskem S.A., the top thermoplastic resins producer in the Americas. The parent company has 36 industrial plants in the U.S., Brazil and Germany.

Odebrecht Environmental: It has offices in Coral Gables and Houston and is developing models for water re-use projects


Shaping the face of Miami-Dade

Odebrecht USA has been involved in the construction of some of the county’s most visited and iconic public structures and venues, including these four:


mwhitefield@MiamiHerald.com

Odebrecht USA. It’s a name that pops up on signs at construction sites all over South Florida and a company that has had a major role in public projects from American Airlines Arena and the Adrienne Arsht Center for the Performing Arts to the North and South Terminals at Miami International Airport.

Despite winning dozens of public contracts valued at more than $4 billion in Florida since working on its first local project, the Metromover, in 1991, Odebrecht USA has been able to maintain a fairly low profile — until recently.

Because the construction company is so prolific in South Florida, many people have assumed it has local roots.

But Odebrecht USA is part of a Brazilian conglomerate that has become a global force with interests that now stretch well beyond Latin America where it’s the largest construction and engineering company in the region.

Part of the reason many people have been confused by Odebrecht’s origins is by design.

“In every place we go, we become local,’’ said Gilberto Neves, 53, president and chief executive of Odebrecht USA. A Brazilian from Minas Gerais who has worked for Odebrecht since 1983, Neves was one of the founders of the U.S. division. “We send a small group from Brazil, and then we hire locally.”

The company’s strategy also includes subcontracting with local companies and it has shared work with more than 300 small businesses in the 23 years it has been in the United States, said company officials.

While Odebrecht is known as a construction company in South Florida, the Brazilian parent company has diversified far beyond that with interests in petrochemicals, sugar, ethanol and bioenergy, power generation, water and environmental engineering, oil and gas, plastics, transportation/logistics, and defense and technology.

It builds oil platforms, has developed a technique to make plastic from sugar cane, is a founding member of Brazil’s Green Building Council, and is a real estate developer in Brazil.

From a small family firm founded in Salvador, Bahia, by Norberto Odebrecht in 1944, Odebrecht S.A. has grown into a multinational with almost 200,000 employees. It is active in 25 countries, and its investment division expects to invest $25 billion around the world over the next three years. Company assets exceed $59 billion, and it is now ranked as the 13th-largest contractor in the world.

The holding company’s projects now dot five continents, but it is the parent company’s work in Cuba that has put Odebrecht USA in the hot seat just as it hoped to embark on one of its most ambitious local projects: Airport City.

The massive, $512 million project would sprawl over 33.5 acres just east of Miami International Airport’s terminals and parking garages and include a business park with restaurants, retail and office space, a four-star hotel with conference facilities, a convenience center that would include services such as a dry cleaner, pet hotel, market and gas station and a new MIA Mover station at the business park.

To realize the project, Odebrecht USA proposed a different business model: It would build Airport City on county land west of Le Jeune Road, get private financing, and then pay rent and a percentage of revenue to the county for 50 years. The airport would continue to own the land, and all the buildings would be titled to the airport.

Odebrecht sees the project as a win-win for itself and the county. It gets to build a massive new development on public land; the county would get new revenue from land leases, revenue sharing and the new Airport City businesses that would pay taxes.

Odebrecht had hoped the project would be underway by now. But instead of breaking ground, Odebrecht has run into roadblock after roadblock.

Because it’s an airport project, the Federal Aviation Administration needed to sign off on the proposed lease agreement with the county and certify that there was no appreciable environmental impact. After a back-and-forth on questions, the FAA approvals finally came in January and March — more than a year longer than Odebrecht had anticipated.

But well before that, the project hit a wall when politicians became aware that Companhia de Obras em Infraestrutura, an affiliate of Odebrecht USA’s parent company, was working on a project to revamp the Cuban port of Mariel. The Brazilian company also has signed a 10-year joint production agreement with the Cuban government to operate a sugar mill and help revive the country’s ailing sugar industry.

In a letter to the Miami Herald editorial board, Mario Claver-Carone, director of the pro-embargo U.S.-Cuba Democracy PAC, accused Odebrecht of “seducing Miami-Dade County commissioners” for more than a decade to win contracts all over the county. Companies that choose to do business with Cuba, he said, shouldn’t also profit from “Cuban-Americans in Florida’s free market.’’

“Politics is politics anywhere in the world. We are apolitical,’’ Neves said. “We think the economic benefits for Miami-Dade County would outweigh’’ any concerns about Cuba.

State legislators also got into the act, approving a law in March 2012 that appeared to target Odebrecht. It prohibited state and local governments from hiring companies with business ties to Cuba for any work worth at least $1 million. It was set to take effect July 1, 2012.

Odebrecht USA quickly sued in federal court in Miami, contesting the law. The Coral Gables-based company said it has never done business in Cuba and contended the Florida law was unconstitutional and unenforceable because it set foreign policy. A federal appeals court ruled in favor of the company in May, and the state of Florida said last month it won’t contest the ruling and the law won’t be enforced.

Odebrecht USA doesn’t report to the same division as the one overseeing the projects in Cuba. Neves’ boss works for Odebrecht Industrial.

Industry sources say the Mariel project is nearing completion. But Companhia de Obras em Infraestrutura has a confidentiality agreement with the Cuban government that precludes Odebrecht from providing any details about the work, said a company spokesman in Brazil.

The powerful Miami-based Latin Builders Association opposes Odebrecht’s bid to build Airport City. Bernie Navarro, LBA president, wrote to executives of industry associations in late March opposing Odebrecht’s involvement in Airport City and urging solidarity with “our brothers in Cuba.’’ Odebrecht had invited construction trade organizations to attend an April 1 information session on the project.

“I can assure you that the LBA will not help Odebrecht in their continuous pursuit of Airport City,’’ he said in the letter. “We can’t allow Odebrecht to traffic with our suffering. You do business here or you can do business in Communist Cuba. It is a choice. It can’t be both ways.”

Navarro said that’s still the position of the 750-member LBA. “It was pretty controversial,’’ he said. “We genuinely like Gilberto Neves and know he doesn’t control what his parent company does in Cuba, but he does work for them.”

The Cuba controversy is somewhat ironic for Odebrecht USA, given its early history.

It was the late Jorge Mas Canosa, founder of the exile Cuban American National Foundation, who first introduced Odebrecht USA to South Florida. Mas’ Church & Tower (now MasTec) was its first partner after Odebrecht USA incorporated on Aug. 20, 1990.

Odebrecht had a 75 percent interest and Church & Tower had the remaining 25 percent in the joint venture that was the successful bidder for the downtown Brickell Loop of the Metromover.

But it almost missed out on the bid. Odebrecht’s fax broke down just as it was about to tender its bid on deadline. The day was saved when an Odebrecht executive ran to a nearby coffee shop, grabbed its fax and carried it back to the Odebrecht office.

Odebrecht and Church & Tower did a second project together — a South Dade landfill. “We built Mount Trashmore,’’ said Neves.

“We chose Miami because it’s a natural, a gateway city and the language and culture were familiar,’’ said Neves, “and we wanted a presence in the most competitive market there is — the United States — to test ourselves.’’

At first, Odebrecht was focused on winning bids in Miami-Dade County, but then it branched out, doing bridge projects for the Florida Department of Transportation. Among its ongoing Florida projects are adding a runway at Fort Lauderdale-Hollywood International Airport — completion date: summer 2014 — and restoration of the dike surrounding Lake Okeechobee.

MIAMI-DADE PRESENCE

But Miami-Dade County has been Odebrecht’s bread and butter.

Among the company’s local public projects are the Arsht Center; the 50-gate North Terminal, South Terminal and Concourse J at Miami International Airport; American Airlines Arena; MiaMover — the 1.25-mile link between MIA and the Miami Car Rental Center, the AirportLink of the Metrorail system, the Florida International University football stadium, and the Golden Glades Flyover.

It’s now finishing work on a $50 million job to reinforce the wharves at PortMiami. The wharf-strengthening must be completed before dredging begins so the port can handle the huge post-Panamax ships that will soon traverse an expanded Panama Canal. Odebrecht is also working on an I-395 roadway and bridge-widening project near Biscayne Bay.

As the Mariel controversy has swirled, “we just kept working,” said Neves. “We never slowed down.”

Through the years, Odebrecht also has done some private projects, including the Ritz-Carlton Key Biscayne Resort & Spa, Fortune House, a 29-story apart hotel, and Ocean Steps, a residential building in Miami Beach with shopping on the ground floor.

Odebrecht often joint ventures with local companies and it likes to use small businesses as subcontractors. It’s also a generous contributor to local charities, cultural organizations and schools.

Odebrecht’s philosophy has long been to grow its own business while bringing small businesses along in the process.

When Eloise Gonzalez’s Miami company, Commercial Interior Contractors Corp., became a Odebrecht subcontractor some 20 years ago, she described her business, which does drywall, painting, flooring and carpeting, as “peanuts.’’

“Gilberto was my mentor for many years. He took the time to teach me,’’ she said. “I got an education from them that I consider my MBA.’’

Through the years, Gonzalez has worked on the MIA terminals, Fortune House, the MiaMover and the Miami-Dade Water & Sewer headquarters as a subcontractor.

She also was tapped by Odebrecht to work on reconstruction of the Port-au-Prince airport after the 2010 earthquake in Haiti. “To me this is their most honorable project. They contributed money, food, supplies, laborers, you name it,’’ she said.

Gonzalez recently won a contract at the Fort Myers airport — not as a subcontractor but on her own. “I was able to get this project because my company is competent and I owe that to Odebrecht,’’ she said.

In the past two decades, Neves said, Odebrecht has awarded Florida small businesses $800 million in sub-contracts, generating 103,000 direct and indirect jobs.

“I don’t think we can refute that,” said Navarro, “but the issue of Cuba is still fresh on many people’s minds and the Latin Builders is an organization built on helping Cuban builders who needed representation after they fled their homeland. We can’t just put that into a vacuum — even if Gilberto is a good guy.”

‘SHOVEL-READY’

Now with the FAA approvals in hand, Odebrecht executives would like to get started on Airport City. “We are shovel-ready,’’ said Bernard Zyscovich, whose firm is the planner and architect.

But there is a crucial missing ingredient: approval by the Miami-Dade County Commission. No date has been set for a vote on the politically volatile project.

Former MIA Director José Abreu, who retired earlier this year, was a fan of the Airport City project.

When his successor, Emilio T. González took the reins in April, he wanted to review it and asked to reopen negotiations with Odebrecht to give the county a better deal. There have been several meetings.

“We are renegotiating the Airport City agreement to terms that better correspond to the current financial climate, since the original terms were negotiated soon after the recession,’’ González said.

But González gives high marks to Odebrecht’s work at the airport. “The Parsons-Odebrecht joint venture team has delivered to the county award-winning facilities like South Terminal, North Terminal and the MIA Mover that have doubled MIA in size and modernized it into a world-class airport, and they have been tremendous partners in the transformation of MIA over the last decade.”

Neves said when the airport director asked for more, including an increase in transfer fees, Odebrecht agreed. The company also addressed county concerns about sequencing of construction on the four parcels of land involved. “I think we’ve reached a deal,’’ Neves said.

Greg Chin, communications director at the airport, said it’s unclear whether a renegotiated agreement would have to be submitted to the FAA again for approval.

When the negotiations with Odebrecht are concluded, González will make a recommendation to the mayor, and it will be up to him to send the contract to the commission. Before a vote of the full commission, the deal will be subject to committee review.

Neves said he’s hopeful there will be a vote before the end of the year.

Zyscovich said the proposed project is part of a worldwide trend toward developing commercial and tourist centers within airports to generate non-aeronautical revenue. “In order for us to stay competitive, Airport City is a very important piece,’’ he said.

A study commissioned by Odebrecht estimates the economic impact once Airport City is operating at $1.6 billion annually. Economist Tony Villamil, who was retained by Odebrecht, said Airport City will create 5,800 jobs during the construction phase and 10,000 direct and indirect jobs once it is fully developed and operational.

The genesis of Airport City goes back several years. Odebrecht USA itself came up with the idea and first took it to the airport.

“For many years, we saw all this vacant land that they weren’t using at the airport,’’ said Neves. Odebrecht prepared a report and presented the airport with possible opportunities for the land. “But it didn’t seem to have any traction at first.”

But when Abreu took the helm, he saw the opportunities, said Odebrecht officials.

The county heard oral presentations from two contenders for the airport project — Odebrecht and Megaladon Development — in 2009 and Odebrecht, as the highest-ranked team, won the right to negotiate a lease for the project with the airport. It spent all of 2010 negotiating the Airport City deal with the county and agreed to general terms in late 2011.

MOVING AHEAD

With Airport City in limbo, Odebrecht USA is moving ahead with its other Miami-Dade projects and the Odebrecht holding company continues to dominate work on major construction projects throughout Latin America.

At home in Brazil, it has had a hand in renovating Rio de Janeiro’s famed Maracanã soccer stadium, which will be the site of the final World Cup game, has finished construction on two of three other soccer stadiums that will be used for the 2014 World Cup, and is working on the first phase of a massive port redevelopment project, Porto Marvilha, in Rio. It’s also involved in construction of the athletes’ village for the 2016 Olympics in Rio de Janeiro, oil rig construction for Petrobras and hotel projects.

It has ethanol plants in Matto Grosso and Goias — it’s the leading bio-energy company in Latin America, industrial plants, hydro projects and green energy projects.

In Brazil, Odebrecht began work on a $6 billion project in the Amazon, the Santo Antônio Dam, about the same time as it started putting together the Airport City project. Despite the need to divert the Madeira River and hire 13,000 workers for the project, it may finish the dam before Airport City goes forward.

“It’s mind-boggling what’s going on in Brazil,’’ said Neves.

Odebrecht also is working on Panama City’s first subway line, the Cinta Costera highway project that crosses the water in front of the capital’s historic section and the $700 million expansion of the Tocumen International Airport. Company executives say they now expect they are the biggest construction company in Panama.

The firm also is involved in the expansion of the Caracas subway; the Rota do Sol Highway, which connects Bogotá to Colombia’s Caribbean coast; hydroelectric plants around the Americas, oil exploration in northwest Venezuela, a high-speed train in Portugal and restoring an iron-ore transporting railroad in Liberia.

Now Airport City could end up as one of Odebrecht’s greatest successes in South Florida or a source of continued turbulence.

Navarro said he expected the LBA would take a similar attitude with other Miami-Dade contracts that might involve Odebrecht. “It’s all in the same context’’ of Mariel, he said.

At this point, Odebrecht has spent “millions and millions’’ on planning and trying to win approval for Airport City, said Neves, “and I would say it is a greater deal for the county than it is for us.’’

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