Love and Money: New Airport Concessions Deal Gets Pricey.
Love and money: When a divided city council voted in August to open up bidding to all comers for food and retail concessions at Love Field Airport, City Hall probably hoped it'd heard the last of a fight that pitted Mayor Tom Leppert and white council members against minority council members. There's no scar on the body politic that Buzz won't pick, however, so when the council on October 13 approved lease extensions for the two current, minority-favored concessionaires—Star Concessions and Hudson Retail Dallas—we decided it was time to take a look at how Mayor Tom's plan is working out.
Oh, and looky there! Under the extensions, which hold until construction of the new terminal finishes in October 2014, the city stands to make about $6 million in rents, depending on how well business does at the airport. That's about $3.4 million less than what the city expected to make under the original, staff-endorsed Love plan Leppert opposed. (Leppert nixed that deal because it didn't provide for competitive bidding at all of Love's concession space.)
Assistant City Manager A.C. Gonzalez tells us he really hasn't paid attention to the change in projected revenue, but he took us at our word. He said the only significant difference in the new contracts is an adjustment to rent payments based on the reduction in passengers expected when the west wing of the terminal is closed during construction.
Gonzalez and his staff are working on "themes" for the concessions space—which areas will serve pizza, overpriced booze, stuffed armadillos and Dean Koontz novels, etc.—and also dealing with how to accommodate all those folks. For example, instead of having one commissary where one food and beverage vendor could store products, a commissary outside of the terminal may be needed to serve numerous vendors. That means each vendor will have trucks running back and forth. Will all these headaches add up to more dough?
"It does impact cost," Gonzalez said. "There would be those—the mayor and others—that would argue, 'Well, yeah, there's cost there, but there's big savings and opportunity on the other side to offset that.'"
And there's the rub. No one has any idea how much money the contracts following construction will bring in. Heck, Star and Hudson could very well come out as winners with the original bids they submitted, and they already have dibs on 27 percent of the space if they want it.
We'll continue to keep tabs on the net effect of Leppert's big push because, well, we know no one at the city will.
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