Poised to profit as Cuba changes
The Port of Miami, and to a lesser extent Tampa, could hum with billions of dollars each year in trade, economists estimate.
By JAMES THORNER and STEVE HUETTEL
Published August 2, 2006
As the world keeps watch on Fidel Castro's sickbed, Florida businesses are searching for signs of life in a Cuban economy more or less shut to American trade and investment the past 45 years.
A U.S.-friendly, post-Castro Cuba 90 miles off Key West could return Florida to the days before 1959 when the state was the island's main trading partner and 40 percent of Miami's cargo steamed to Havana and other ports.
If for no other reason than proximity and family ties, Florida is poised to supply tools and materials to upgrade Cuba's mostly ragtag infrastructure and food and consumer goods to make up for communist-era deprivation.
The Port of Miami, and to a lesser extent Tampa, could hum with what trade economists estimate would reach billions of dollars each year.
"You've got to eye it with anticipation," Trammell Crow construction company executive Bob Abberger said of the Tampa Bay area's prospects. "We're arguably in the catbird seat."
The first wave of trade - should Cuba open its doors - would consist of humanitarian supplies, followed closely by ships loaded with stuff to rebuild the country, said Richard Wainio, Tampa's port director.
"The roads, the bridges, the rail system - the whole country's dilapidated," he said. "You'll see a lot of construction materials, heavy equipment, practically everything Home Depot sells."
Tampa is well positioned to benefit. The port has lots of space for smaller ships with cranes on board that typically serve Cuba's underdeveloped ports, Wainio said.
But local businesses face stiff competition from other states, and within Florida itself.
Miami-Dade County companies hatched plans long ago to trade with post-embargo Cuba and consider South Florida geographically, ethnically and culturally matched with the island nation, said Frank Nero, chief executive of the Beacon Council, Miami-Dade's economic development agency.
"There's no question that a free, post-embargo Cuba will bring an era of renewed, substantial U.S.-Cuba trade," he said. "Naturally, a lot of that will flow through Dade County."
So much for trade. What about investment?
Disputes over ownership of land confiscated by the Castro government could put a chill on development by U.S. investors. But Cuba keeps archives of property titles so that corporations, before pouring money into a project, can assess the risk of legal claims from dispossessed former owners, said Olga Pina, a partner in the Fowler White law firm in Tampa.
European investors have successfully developed joint ventures with the Cuban government by settling former owners' property claims, she said.
Tourism promises to boom as Americans locked out of the country since the Kennedy administration demand a glimpse of such sights as Havana's Old Town.
Sam Ellison, who heads up international operations for the Beck Group, a construction company, said lots of firms are "poised and ready" to supply modern amenities in the much neglected tourism sector.
"You'd see a big boom in resort development, golf courses, marinas, especially along the coast," Ellison said.
Opening Havana to cruise ships would give Tampa-based vessels more attractive three- and four-day itineraries than the standard trips to Cancun, Wainio said.
Castro has expressed a desire for cruise lines to use Cuban cities for home ports instead of just day trips for passengers. "Provisioning ships and people staying in hotels, that's where the big money comes in," Wainio said.
You can't fly directly from Tampa to the island now, but a free Cuba would be a popular destination for airlines flying from Tampa International Airport. Such traffic awaits bilateral agreements between the two governments, airport executive director Louis Miller said.
For businessmen like Abberger, U.S. companies are working from disadvantages born of 40 years of embargo. For example, Trammell Crow, despite a strong presence in South Florida, has honored the embargo by refusing to scout prospects in Cuba.
Foreign companies enjoyed a head start. Forty-nine Cuban hotels are under foreign management, but you won't find Holiday Inn and Hilton among them.
Cuba's top export is the mineral nickel, but the mining company that runs the operation is Canadian. China is helping Castro's government prospect for oil near the Florida coast.
France's Pernod Ricard makes and sells Cuban rum. Telecom Italia, not Verizon or Time Warner, helps run the island's fledgling Internet network.
"You know the potential is huge, but you know others are better positioned," Abberger said. "'We've got to hope our proximity and resources will overwhelm the relationships that foreign company's already have there."