Atlanta airport concessions contracts linger as mayor releases airport GMSome airport concessionaires price gouge passengers, an Atlanta audit determined. File/Credit: David Pendered
By David Pendered
The backlog of requests for proposals at Atlanta’s airport includes nine RFPs for food and beverage concessions, including four that date to October 2015. An RFP for a firm to audit concessionaires, to ensure the airport collects all the money it’s due, remains open though it was first issued in September 2015, city records show.
Almost an acre of concessions space is up for grabs – about 39,465 square feet. An acre covers 43,560 square feet.
Atlanta Mayor Kasim Reed said Monday that he was not going to go back in time to explain why he released Aviation General Manager Miguel Southwell, according to published reports.
But the lingering concessions contracts may have factored into Reed’s decision because of troubles the city encountered in completing a concessions package in 2011. Reed did not get the prompt and clean procurement process he’d planned.
That was the time when the Reed administration issued what Reed said was the largest airport concessions package in the history of North American airports. The total package for 150 storefronts was worth an estimated $3 billion. Terms called for seven-year contracts, with options for three-year renewals.
Five years later, city officials are now in the process of working to complete a recent batch of planned airport contracts:
- 10 food and beverage concessions contracts – four were posted in October 2015 and five were issued in March;
- A contract to market the airport concessions – first posted Feb. 11 and now under evaluation;
- A contract for two gaming lounges with consoles or computers, with or without seating, in a total of up to about 2,000 square feet – first posted Oct. 20, 2015 and now under evaluation; one vendor submitted a bid;
- A contract to audit concessionaires every six months to ensure they are paying the city all the money owed – first posted Sept. 2, 2015 and still open.
The audit contract is important because concessions contracts call for the city to be paid a percentage of a business’s gross revenue. The contract was posted Sept. 2, 2015. The deadline was extended to Oct. 14, 2015. As of Tuesday, the contract remains open, according to city records.
A total of nine sites for food and beverage concessions are on the block, in addition to one food common area.
Concourse E is has a lot of space available, a total of approximately 25,993 square feet in two packages. This block represents 66 percent of the space available for food and beverage concessions. RFPs were posted in March.
Throughout the airport, available spaces range from as small as about 294 square feet to as large as about 14,833 square feet.
The smallest spot is for a branded coffee shop on Concourse A. The largest spaces are on Concourse E – 14,833 for four food and beverage concessions, plus one food court common area; and 9,486 for five food and beverage locations.
Back in 2011, Reed often noted with pride the fact that Atlanta had issued $3 billion worth of concessions packages, which he said largest airport concessions package in the history of North America. Reed had hoped to issue the package before the end of 2011.
But a series of delays ensued.
Reasons included the city’s decision around Labor Day 2011 to rebid the packages due to technical issues; legal challenges filed in Fulton County Superior Court; and an administrative ruling by the Federal Aviation Administration that said Atlanta was responsible to certify disadvantaged business enterprises. Atlanta relied on certification provided by the Georgia Department of Transportation. GDOT had certified four businesses that the FAA questioned.
Reed signed the contracts March 12, 2012. At the time, Reed’s administration said it was pushing for a quick vote in order to have restaurants and shops open for the opening of the new international terminal. The $1.4 billion terminal opened May 16, 2012.