Concession Giant Calls Leftovers at Love Field "Very Desirable"; Magazine CEO Says Extending Contracts "Is Not an Unusual Practice"

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Patrick Michels
Mayor Leppert has a letter from a major company claiming they won't bid on the Love Field concessions leftovers 'cause it ain't worth their time. But another big-time company calls that same space "very desirable."
One of the arguments presented by Mayor Tom Leppert in his quest to bid out the contracts for the food and retail concessions at Dallas Love Field Airport is that no one's really interested in the 46 percent of the square footage at the brand-spanking new terminal that's scheduled for bids later this year. Of course, the city council's Transportation and Environment Committee by a 10-0 vote on February 22 had approved contract extensions for the current concessionaires (Star Concessions and Hudson Group) to occupy the remaining 54 percent before Leppert decided to intervene and create and ad hoc committee, which accomplished very little in its three two-hour sessions.

At the Love Field Concession Committee's first meeting on May 20, Leppert mentioned that he had spoken with two folks who found the 46 percent left over "not attractive." At the third and final meeting on June 2, he attempted to back up that claim by reading from two letters he received: one co-authored by Guillermo Perales and Rick Dobbyn of Sun Holdings and another written by Matthew King of Delaware North Companies Travel Hospitality Services, both of which can be found after the jump.

Council member Carolyn Davis was quick to point out that four companies owned by Perales, who operates concessions at Dallas/Fort Worth International Airport, filed for Chapter 11 bankruptcy last year.

In their missive to the mayor, Perales and Dobbyn admitted that "certain rare circumstances" necessitate a no-bid process, but this was not one of them. While they urged the city to use a full open-bid format, they didn't say they wouldn't bid on what was already planned to go out for bids.

King, on the other hand, said his company, which is a major one, "cannot justify the expense and effort" required to bid on the remaining space. He also said it doesn't make sense for the city not to "maximize its revenue potential" by bidding the contracts.

"The failure to employ a truly fair, open and transparent competitive process for all of the concession space is not a sound business practice, runs counter to Dallas' longtime reputation as a city open for business and discourages companies from pursuing business opportunities with the city of Dallas," King wrote on June 1.

In this week's paper version of Unfair Park, we take a look-see at the mess Leppert's created. Want to know how big a deal this is to the mayor? Consider that he balked at discussing the convention center hotel and himself for previous cover stories, but he agreed to an interview about this issue.

One of the many documents we discovered and couldn't cram into our story is a letter from HMSHost's Steve Johnson to Deputy Mayor Pro Tem Pauline Medrano claiming that the leftovers are "very desirable" and his company, which operates in 88 airports in North America and 111 worldwide, would "welcome the opportunity" to bid on the packages.

Also worth noting is the June 9 front-page story in The Dallas Morning News with the headline "Departure from the norm."

Here's the lede: "A plan to hand over more than half of concession space at a renovated Dallas Love Field without competitive bidding is out of the ordinary and could result in a worse deal for the city-owned airport, airport consultants say."

Pauline Armbrust, president and CEO of Airport Revenue News, was quoted in the piece as saying it's "really, really unusual in the industry" to extend the contracts of the two current concessionaires. She was also quoted as saying, "To go to the lengths they're doing now [for the current operators] doesn't feel right."

Then, four days later, a letter from Armbrust contradicting much of what the paper had quoted her as saying was published at the back of the business section.

"Airports today typically do not go out for bids to find the best concessionaires," she wrote. "They issue what is called a Request for Proposal. This is a complicated, lengthy and costly process for all parties involved. For several reasons, many airports will forgo issuing an RFP and instead grant contract extensions to existing concessionaires who have already proven their success. This is not an unusual practice in airports."

So what are we getting at here? Perhaps Armbrust says it best when she describes the issue as complex. We'd say it's not a black-and-white issue, but it actually has become just that -- an issue of race. Right now it appears as though the mayor has the whites lined up with him and the minorities are on the other side. It's a 7-7 deadlock with Angela Hunt as the swing vote, and next week we'll find out which side she chooses. Concessions Letters


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