Longtime food-and-beverage concessionaire Gilbert Aranza requested a temporary restraining order and filed a lawsuit against the Dallas/Fort Worth Airport board late this afternoon, stemming from a disagreement regarding approximately $279,000 the board claims he owes in back rent. While the TRO aims to halt the board's vote tomorrow morning that could terminate four leases under which Aranza operates six restaurants, the suit alleges that the money owed is either a mutual mistake between Aranza and the board or a mistake solely by the board, which he claims is "coupled with fraud or inequitable conduct by the board."
The disagreement between the two parties began in April when Aranza and other alcohol vendors at D/FW were notified that they hadn't been paying rent since 2004 on the state's 14 percent mixed-beverage tax, with the airport claiming that they were improperly excluding it from their gross receipts. Gross receipts are used to calculate monthly rent payments. Only one vendor had been paying, according to Aranza, which was discovered in an audit. Those who hadn't paid were sent demand letters and told that they could not bid for space in the renovated Terminal A if the arrears weren't rectified.
However, Aranza says while new leases signed in 2004 changed the definition of gross receipts, the intent by the board was not to include the mixed-beverage tax, and he has an affidavit from a former D/FW employee to prove it. Pat Gleason, the vice president of airport concessions and vice president of revenue management in 2004, in an affidavit signed May 14 says it's standard practice to exclude alcoholic beverage taxes from gross receipts, and the change to the contracts in '04 led to an "unintended interpretation."
"There was never a formal decision made by D/FW to prohibit the exclusion of alcoholic beverage taxes from the definition of 'gross receipts,'" Gleason added.
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While Aranza is the only concessionaire not to pay up thus far, e-mails obtained by Unfair Park suggest that at least one -- HMSHost -- paid under protest. The following message was sent on May 20 from Anthony Alessi, vice president of business development at HMSHost, to several high-ranking D/FW officials.
The fact of the matter is that concessionaires do not gain ANY financial benefit from this state tax levied. What you are asking is for us to pay the tax, then pay rent on the tax. The concessionaire makes no revenue in the entire scenario. To the legal argument below, it is a cost of doing business. We don't pay the airport additional rent on "other" cost of doing business line items associated with the airport, so how would this be any different? In addition, the TABC says we cannot separately state it on our receipts, so to us, this just looks like a creative way for the airport top make more money off their concessionaires.
To further our point on the logic of DFWs position on this issue, our prior leases at DFW allowed us to exclude it, we are in 85 airports across the country that allow us to exclude these types of taxes, we have 3 airports and 2 malls in the State of Texas that allows us to exclude this specific tax and by DFW not trying to collect this since 2004, only continues to show the intent was to allow it to be excluded like common practice for any other tax.
We truly hope the airport will see the common logic/practice on this issue and not enforce the collection of rent on a tax.
We're awaiting comment from Alessi and a copy of the final legal documents from Aranza. And when we receive word regarding if the TRO is granted and when the temporary injunction will be heard, we'll update accordingly. (Update: The TRO was granted, and the temporary injunction hearing is scheduled for November 15.)
The board meets tomorrow morning at 9 a.m. Mayor Tom Leppert, who led the fight against Aranza's contract extensions at Love Field Airport this summer, is one of the 12 board members.