Second Concession Opportunity Underway Even As First Remains Unresolved
The concessions department at Los Angeles International (LAX) will face a daunting task over the next several months, when the vast majority of retail and food and beverage offerings are set to be overhauled. Concessions agreements at eight of the nine terminal buildings at LAX are expiring, prompting airport executives to move forward on a second group of concessions opportunities, even when contracts for the first group are far from resolved.
Last week, LAX posted a draft request for qualifications (RFQ) for a terminal commercial manager or managers (TCM). While the draft RFQ didn’t specify individual terminals, concessions director Amy Shaw says the RFQ involves Terminals 1, 2, 3, 6 and the Tom Bradley International Terminal, as well as the airport’s Theme Building. Due to the Bradley West expansion project, contracts at the international terminal were previously extended to December 31, 2012, but all other concessions contracts will expire at the end of this year.
Shaw says a TCM is “similar to a building developer/concessions manager,” and adds that the model is more applicable in some terminals than others. “We split it out because 4, 5, 7 and 8 are airline controlled terminals, and the concessions spaces really are what they are today,” Shaw says. “Terminal’s 1, 2, 3, 6 and the Tom Bradley International Terminal are under the control of the airport so there is a potential for expanding concessions spaces.”
The draft RFQ calls for submissions from “firms with demonstrated experience in developing, leasing, marketing and managing high-volume, upscale retail shopping, dining and other passenger service concessions to develop, sublease and manage certain concessions and services at Los Angeles International.” The draft says that successful proposers “must deliver customer service amenities, a strong commercial vision and a passenger experience at LAX competitive with the world’s leading international airports.”
Comments on the draft RFQ will be accepted through Friday, Shaw says. A final RFQ will be issued shortly after. Airport officials will evaluate qualifications on interested parties. “Those that are deemed to be qualified will be issued an RFP,” she says. “That’s when they will propose on the specifics of the terminals.” Shaw says there is currently no set timetable for those actions.
Meanwhile, airport executives are awaiting the results of an investigation into conflict-of-interest allegations made by one of the bidders on concessions packages at Terminals 4, 5, 7 and 8. LAX announced the winners last spring, but the process came under scrutiny after several companies protested various aspects of the awards and one claiming a conflict of interest related to two consulting companies advising LAX on the bids.
A meeting of the Los Angeles City Council’s Board of Referred Powers, which will decide on the conflict-of-interest charge on advice from city attorney Carmen Trutanich, is scheduled for September 13. It is unclear whether the board will issue its final decision at that time.
Sources say that even if the conflict-of-interest charge is dismissed, there are still several protests pending that will have to be dealt with before contracts can be awarded. If the conflict-of-interest charge holds, the entire bid process will be redone.
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