Infrastructure & Environment

Rough Landing: Miami Airport Deals With a $1 Billion Debt

Real-life sinkholes are a problem in South Florida, but the one giving Miami-Dade County officials headaches these days is figurative: Miami International Airport's finances.
by | March 2007

Real-life sinkholes are a problem in South Florida, but the one giving Miami-Dade County officials headaches these days is figurative: Miami International Airport's finances.

The airport is engaged in a massive overhaul that will increase capacity by millions of passengers. "What we're into," says John Cosper, deputy director of MIA's capital improvement program, "is the largest expansion of a terminal area in an operating airport that's ever been done."

But it is not without travails. The project began inauspiciously in the 1990s, when MIA agreed to create a new terminal for American Airlines. Other airlines sued and, as part of the settlement, they got a new terminal, too.

The latter project, the South Terminal, is expected to open this summer, two years late. The bigger problem, however, is with American's North Terminal. Ballooning costs--higher prices for construction materials and a hot local construction market--helped create a $1 billion shortfall in MIA's capital improvement program.

Officials think things have begun to turn around since 2005. That's when the Miami-Dade County Commission took control of the North Terminal renovation from American, which was initially managing the project. Commissioners tweaked the design to cut costs and hired a new team to oversee the project. That wasn't enough, however, to prevent Moody's Investors Service from downgrading the airport's credit rating late last year. Against that backdrop, commissioners will be voting soon on whether to authorize bonds to pay for the additional $1 billion.

Josh Goodman
Josh Goodman  |  Former Staff Writer
mailbox@governing.com

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