Lucrative airport contracts to be awarded this year, amid city elections

By David Pendered

Atlanta proposes to lease 88 retail locations at the city’s airport across a total of about 70,000 square feet. The plan is for current members of the Atlanta City Council to approve recommendations of an evaluation committee, and for Mayor Kasim Reed to execute the contracts.

airport concessions

Atlanta is seeking proposals for 88 retail spaces at the city’s airport. Last year, the airport concessions program exceeded $1 billion in gross revenues, the airport reported. Credit: David Pendered

This timeline puts the review and adoption of the retail contracts smack in the middle of the city elections. Election-day is Nov. 7 and a run-off election, if needed, is set for Dec. 5. The last scheduled council meeting of the year is Dec. 4.

Airport concessions contracts are among the more lucrative the city awards.

Last year, the airport concessions program exceeded $1 billion in gross sales, airport officials announced. That’s up from $700 million in 2009, according to an airport report. The sum includes concessions for food, beverage and retail items sold at Hartsfield-Jackson Atlanta International Airport.

Returns can be high because passengers are a captive market while they wait to board a flight. Typically, they are well-heeled, with average incomes above $80,000, giving them capacity to buy items that the concessions contract allows to be priced 10 percent above market prices outside the airport

And there are lots of passengers at Atlanta’s airport – 104.2 million in 2016, according to a report by the world’s busiest passenger airport. About 5.7 million of these passengers have a lot of time to kill; they’re departing on an international flight and are advised to arrive about three hours before the flight is to leave.

airport atrium

Airline passengers, like those in the Atrium at Atlanta’s airport, are likely shoppers because they tend to be affluent and have time to kill as they await flight. Credit: flickr.com

The city has divided the retail package into multiple pieces. This approach is intended to allow companies to be competitive regardless of their size. That is, provided that they can meet the minimum qualifications. Joint ventures are allowed.

Terms call for the retail leases to extend seven years, with a three-year renewal option.

Ten retail packages are available via 10 requests for proposals. Packages range in size from the largest, at about 17,084 square feet, to the smallest, about 347 square feet. Locations are available on all five concourses.

The total space available is less than half the size of the average Walmart Supercenter. Supercenters  average 179,000 square feet, according to a report on 247wallst.com.

The RFPs are fairly restrictive in terms of the merchandise to be sold. Here are snapshots of the 10 RFPs, going from largest to smallest in terms of square footage:

  • 22 retail locations spread cross about 17,084 square feet, located on Concourse B and the Atrium. Various shops are to sell pet accessories, sunglasses, news and souvenirs, candy, high-end watches and jewelry, electronic gadgets and cell phones, fruit and special diet foods.

    ROOSEVELT COUNCIL

    Roosevelt Council, general manager of Atlanta’s airport

  • 20 retail locations spread across about 15,477 square feet, located on Concourse C and D. The merchandise list is similar to the one above.
  • 18 retail locations spread across about 15,255 square feet, located on Concourses A and T. The merchandise is similar to the one above.
  • 6 retail locations spread across about 6,882 square feet, located on Concourses A and T. Various shops are to sell newsstand items and coffee, a creative specialty retail concept to be created by the vendor, electronic gadgets and cell phones, products unique to and representative of Georgia.
  • 2 retail locations spread across about 5,871 square feet, located on Concourses B and C. Merchandise in the two shops is to include newsstand items, convenience-store goods, a locally themed bistro to serve made-to-order food that meets special diet needs and offers a children’s menu.
  • 7 retail locations spread across about 5,207 square feet, located on Concourses B and D. Merchandise items are to include electronic gadgets and cell phones, high-end watches and jewelry, clothing and accessories for younger adults, national or international brands on a theme created by the vendor, news and souvenirs, and travel needs such as tote bags.
  • 2 retail locations spread across about 1,728 square feet, located on Concourse A. Merchandise is to include newsstand items and souvenirs, and a creative specialty concept to be created by the vendor.
  • 2 retail locations spread across about 1,141 square feet, located on Concourse D. Merchandise is to include newsstand items and souvenirs, and a creative specialty concept to be created by the vendor.
  • 2 retail locations spread across 1,061 square feet, located on Concourse C. Merchandise is to include newsstand items and souvenirs, and a a creative specialty concept to be created by the vendor.
  • 7 retail vending locations spread across about 347 square feet, located on Concourses A and D. This is not your average vending operation. According to the RFP: “Products sold should include a variety of retail products which may include electronic products and gadgets, accessories, apparel, beauty products, toys, games, travel accessories and the like. No consumable items (food or beverages) may be sold in retail vending locations. News, convenience or market [sic] are not permissible in these retail vending units.”

 

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

5 replies
  1. Greg says:

    The long, and sometimes smelly process of “awarding” contracts at the city’s airport is a familiar one to Atlantans who are so tired of politicians sticking their fingers into the mix…..and sometimes pulling out very lucrative plums. “The term “low bidder” has become something of a joke in a city where “who’s gonna grease my palm today?” ‘ has become the prevailing mantra. For example, the fact that an individual forwarded several hefty checks to the father of the current mayor, had absolutely nothing at all to do with the check writer then getting a very lucrative transportation contract at the airport. Nothing at all. Nothing to see here, folks,….now move along.Report

    Reply
  2. thecontenthouse says:

    The most corrupt — and easily proven to be corrupt — process in American politics is the awarding of Atlanta contracts. Wonder if a journalist, or the FBI, is looking into already-awarded airport vendor contracts recently being pulled because principles are supporting the “wrong” mayoral candidates. Apparently, no one wants to expose these truths. Would the press coverage of Atlanta politics be different if this was an administration of differing political leanings? Nah….Report

    Reply
  3. Greg says:

    On Feb 21st of this year, federal agents served a subpoena as part of an investigation into Atlanta’s purchasing and contract awarding processes. The agents seized a computer and other records from the office of the city’s top procurement department officer, Adam Smith. By an amazing coincidence, Smith was fired by the city on that very same day.Report

    Reply

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