The last time Radames “Michi” Villalón lost a round in Miami International Airport’s baggage-wrap wars, he took his business elsewhere: outside MIA. That was in 2010 and Villalón’s company, Secure Wrap, started wrapping luggage off-site after losing the lucrative MIA contract to a competitor.
Secure Wrap reclaimed the MIA contract in 2013 and now is waging a battle against a familiar business model: outside baggage wrapping. On Tuesday, county commissioners are set to take a final vote on a plan backed by Secure Wrap that would impose MIA’s first regulations on outside baggage wrappers.
Mayor Carlos Gimenez issued a rare veto the first time the rules passed the commission earlier this month, forcing this week’s showdown on legislation requiring MIA to impose standards on all wrapped luggage that comes through the airport.
“I can tell you, my district has been very outspoken,” said Rebeca Sosa, one of 10 commissioners voting for the new rules on Oct. 6 but who is now considered a potential flip to the mayor’s side. “I have received a lot of feedback from my constituents. They are not happy with the idea of being told where to buy something.”
MIA officials claim enforcing the new rules would mean a costly new logistical operation at an airport that handles about 40,000 pieces of luggage a day. They maintain outside luggage causes no significant problems, and that the new rules would mainly bolster Secure Wrap’s profits. American Airlines lobbyist Michael Minerva wrote in an Oct. 9 letter to the airport that the policy would increase expenses and “frustration” and will “threaten our competitiveness. ”
Secure Wrap contends MIA officials, who serve under Gimenez’s authority, are minimizing the problems caused by sub-par baggage wrapping that can jam conveyor belts. Swissport, a baggage-handling company in MIA, wrote the airport on April 29 “urging you to consider permitting only luggage that is wrapped using Safe Wrap’s Airport approved plastic….” Safe Wrap is the brand name for the joint venture with an Italian company that Secure Wrap runs at MIA.
Rebeca Sosa, one of 10 commissioners voting for the new rules on Oct. 6 but who is now considered a potential flip to the mayor’s side. “I have received a lot of feedback from my constituents. They are not happy with the idea of being told where to buy something.
Miami-Dade Commissioner Rebeca Sosa
The 2013 contract that returned Secure Wrap to MIA included standards on how it must wrap plastic and cooperate with federal luggage inspectors. Those include testing wrapped luggage so that it doesn’t slide while on the airport’s conveyor belt. Secure Wrap also agreed to remove the plastic for federal screeners when one of its bags get snagged for a spot inspection.
Unlike outside wrapping companies, Secure Wrap is granted the ability to re-wrap a bag after the inspection — a premium service that allows it to charge more than outside competitors. The company now runs a joint venture with an Italian company at MIA that operates under the “Safe Wrap” brand.
Airport officials say the contract’s standards were never designed to apply to outside wrappers, but Secure Wrap contends MIA created rules that now should be enforced for all wrapped luggage. “From the beginning, they should have stopped the outside wrapping,” Villalón said.
Villalón blamed Gimenez’s opposition to his supporting Julio Robaina in the 2011 mayoral race that put Gimenez in office. Secure Wrap and its executives contributed more than $50,000 to commissioners’ reelection efforts since 2014. In 2012, company executives donated at least $6,500 to the campaign of the new rules’ sponsor on the 13-member commission, Juan C. Zapata.
At the time, Secure Wrap was on the outs at MIA, having lost the airport contract to competitor TrueStar in 2010. Ousted from MIA, Secure Wrap moved its operation off-site and began wrapping luggage at hotels and elsewhere. The business was strong enough that TrueStar claimed in a 2011 federal suit it lost $10,000 a day to Secure Wrap’s off-premise business.
“To protect Safe Wrap from a problem it created when it was outside the airport is a solution looking for a problem,” Gimenez wrote in his veto message issued late Thursday.
Villalón said he’s feeling the heat from the Gimenez administration, with county auditors asking to inspect the company’s books. Secure Wrap demanded auditors sign a confidentiality agreement before looking at the company’s finances; county auditors refused, according to correspondence released by the mayor’s office.
Both sides of the debate agree the new rules would bring big changes to Miami’s baggage-wrap market. Gimenez and his aides see Secure Wrap engineering a monopoly on a contract that currently is generating about $15 million in reported sales. Villalón himself said in an interview he “is not making any money” thanks to minimum annual rent of $9.6 million at MIA and competition from outside wrappers that was stronger than the company expected.
But Secure Wrap predicts a spike in revenue if the rules take effect, forecasting in an “Implementation Plan” that sales would increase enough to trigger a revenue-sharing provision giving MIA 52 percent of all sales. The company is about $4 million short of that trigger now, and MIA director Emilio Gonzalez said: “I don’t believe there is $4 million worth of outside wrapping at the airport.”
Villalón has promised a $50 million suit against Miami-Dade if Gimenez’s veto survives Tuesday. Meanwhile, TrueStar sees the fight as a chance to regain a foothold in MIA’s wrapping industry. Company lobbyist Fernando Aron on Monday sent a letter to Gimenez offering to join SecureWrap as MIA’s second official luggage wrapper. “I believe TrueStar can provide a true solution to all these issues,” Aran wrote.
This version was updated to correct the spelling of Michael Minerva, a registered lobbyist for American Airlines and the company's vice president of government and airport affairs.