A last-minute item before Miami-Dade commissioners on Tuesday would mean a $6 million rent break for Secure Wrap, the politically connected vendor with an exclusive contract to encase luggage in plastic at the county-owned Miami International Airport.
The resolution to waive bidding procedures for an amended contract bypassed the traditional commission committee system, and will face a first, and final, vote at Tuesday’s meeting if no commissioner objects to hearing the item. It would mean a significant windfall for Secure Wrap, which last fall won a crackdown on outside competitors only to see the new rules vetoed by Mayor Carlos Gimenez.
At the time, Secure Wrap said the baggage-wrap industry outside MIA — including home set-ups available at hardware stores — was crippling its business with lower fees. Gimenez objected to stifling competition, saying the company should ask for its rent to be renegotiated. Secure Wrap, which gave more than $50,000 to commission reelection campaigns since 2014, initially won support of the rule on a 10-to-2 vote on Oct. 6, but fell one vote short in overriding Gimenez’s veto two weeks later.
The new proposal comes from Gimenez and includes a package of concessions for Secure Wrap: Instead of paying 52 percent of its revenue to the county-owned airport, it would pay 35 percent. Its minimum rent would drop nearly two-thirds, from $9.6 million to $3.5 million. And Secure Wrap would receive a credit for rent already owed in 2016, with MIA giving the company a $2.7 million refund.
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In exchange, Secure Wrap would give up its right to a two-year extension in 2021, and lower wrap fees to an unspecified amount. A Secure Wrap executive was not available for comment. MIA director Emilio González said a county audit confirmed Secure Wrap’s contention that competition left the business unsustainable, and that the airport risked losing the service altogether.
“It’s a $6 million hit, yes,” he said. “But it’s better than a $9.6 million hit.”
The issue captures the stakes surrounding Miami’s luggage-wrap options, which are particularly popular on Cuba-bound flights because of airport thefts there. Secure Wrap’s corporate predecessor pioneered MIA’s off-airport wrapping industry before it won the contract itself in 2013.
At the time, the holder of MIA’s coveted baggage-wrap contract, Sinapsis, had asked MIA for a rent reduction in order to absorb losses caused by Secure Wrap’s upstart wrapping business conducted in hotel parking lots and other locations beyond the airport. Gimenez and the commission agreed to lower the mandatory rent, but required the Sinapsis contract be put up for bid a year later.
Secure Wrap won the contract, and then last year caused a repeat scenario: asking MIA for relief from competition that was making it too challenging to meet its contractual rent obligations. The Gimenez memo released Monday night said Secure Wrap currently owes MIA $1.8 million in back rent.
But a previously unreported Gimenez memo from last month showed the administration initially pursued a repeat of the Sinapsis sanction too: Secure Wrap was going to be forced to surrender its exclusive MIA contract after one year. The memo, signed by Gimenez and obtained by The Miami Herald, lays out the same proposed rent reduction for Secure Wrap that was proposed this week, but says the new contract will “limit the term to 12 months, during which time the contract will be rebid.”
The memo and accompanying documents, also signed by González on May 6 as they wound through the County Hall bureaucracy on the way to the commission, were submitted for committee review but never made it to an agenda. González said the harsher terms might have left MIA passengers with no baggage-wrap options in the terminals.
“Once people figure out they can wrap at home, they might not come back,” he said. “Quite frankly, we’re concerned if we were to throw them out, or if we were to rebid this, there might not be a market there.”
The twists involved in Secure Wrap’s contract offers the latest bit of intrigue for an airport amenity virtually unknown in the United States beyond South Florida but a reliable source of political drama in Miami-Dade.
One of Secure Wrap’s top allies on the 13-member commission, Jose “Pepe” Diaz, also chairs the Trade and Tourism committee that would have heard the proposed item first. But Diaz requested the item be waived from committee consideration, and then submitted it as a late “add-on” item for Tuesday’s agenda, according to County Hall sources. It only became public Monday evening.
Mike Hernández, Gimenez’s spokesman, said the mayor did not request the abbreviated legislative process for the item, which follows his lone veto of 2015 and that year’s most high-profile confrontation with commissioners.
“There’s no push to put this through as quickly as possible,” he said. “That’s more of a question we would have to direct to Commissioner Diaz and his staff.”
Diaz declined to comment Monday. Spokeswoman Olga Vega noted Diaz’s waiver followed a Trade and Tourism Committee discussion on the Secure Wrap contract and the need for reduced rent, as recommended by airport executives following a presentation of the facility’s year-end results.
A video of the May 12 session shows Diaz asked about the status of the Secure Wrap contract, and González responded that he planned to have an amended contract ready in time for the next committee meeting later this month. Diaz said he would probably waive the item to the full commission, adding: “We don’t want to hear about baggage wrap ever again.”