The city of Atlanta can continue to negotiate with successful bidders for concessions contracts at Hartsfield-Jackson Atlanta International, but the city must turn over additional documents relating to the awards, a Fulton County Superior Court judge ruled Tuesday. The court case was brought by four losing companies, which filed for a temporary restraining order to stop the contracts from moving forward.
The judge ruled that the city cannot sign final deals with concessionaires without first alerting the plaintiffs and allowing them to respond in court, The Atlanta Journal-Constitution newspaper reported. The city must turn over additional documents by January 27, after which the plaintiffs have 10 days to file a protest. Yesterday (Tuesday, January 17) was originally the protest deadline.
The stakes are high at ATL, where a concessions reshuffle and new spaces opening in the city’s new Maynard H. Jackson Jr. International Terminal are expected to generate upwards of $3B over 10 years. The winning companies were announced in December, and the city council approved the picks in January.
A spokeswoman for the city of Atlanta confirmed that Midfield Concessions Enterprises, Take-Off Concessions and Atlanta Airport Restaurants together filed for a temporary restraining order to block ATL executives from signing concession contract deals with winning concessionaires. SSP America filed separately for a restraining order.
The spokeswoman, Sonji Jacobs, said Tuesday that “The city does not believe the law or the facts support either of these filings and will defend its open, transparent and legal procurement process in court.”
The company actions aren’t a surprise to many in the industry. Gregg Paradies, president and CEO of The Paradies Shops, which won one of the retail contracts, says the current uncertainty is “not a concern and not a surprise.” He adds, “The city has been crossing every ‘T’ and dotting every ‘I’ on this since the beginning.”
Time Constraints
In court, the city argued that the contracts need to be finalized so the airport and concessionaires can begin transitioning new and existing concession spaces, particularly in the new international terminal, slated to open in May.
SSP America executives declined to comment, but company attorney Kenneth P. Hodges III reportedly said in Tuesday’s hearing that a wide range of information was redacted by some winning companies, including business plans, executive summaries, past business dealings and locations for the new restaurants. Hodges argued that SSP could not file a meaningful protest without that information, the Journal-Constitution reported.
An industry consultant who asked not to be identified said he expects further protests from companies, and that the city will be forced to deal with them despite the time constraints it faces with the opening of the new terminal.
SSP America initially filed a protest shortly after the winning concessionaires were announced in December. Hudson Group and Pacific Gateway Concessions also filed protests, but all were denied by the city prior to the January city council meeting that approved the winners.
The city of Atlanta is squeezed for time in getting the new concessions up and running due mainly to the fact that the initial responses to the city’s request for proposals were scrapped last summer.
The city said 41 of the 95 proposals received in the initial RFP included disqualifying errors, and it decided to redo the process to ensure a large enough pool of valid proposals. Two of the winners in the second round – Delaware North Companies Travel Hospitality Services and The Paradies Shops – made disqualifying errors in the first round, reports said.
The city said that restarting the bidding resulted in “maximum competition,” but one industry consultant says that decision cast suspicion over the entire process. “It just appears that the companies that the city wanted to win didn’t submit the right documents in the first round, so they had to rebid the whole thing,” said the source, who spoke on the condition of anonymity. He adds, “The second time around seemed very rushed, which also seemed odd.”
Winners Quiet
Noting that the ATL contract winners have been uncharacteristically silent after winning some of the most sought after concessions contracts in the country, one consultant said the calm is likely due to the fact that more protests are anticipated. “I think they are smart to keep quiet until the contracts are signed,” he says. “They don’t want to say anything that could be used against them later.”
Concessions International issued a statement about its win, in a joint venture partnership with H&H, shortly after the city council voted to approve the contracts on January 3. “We feel fortunate to have been one of the four major concessionaires selected to operate at the airport,” Donata Major, the company’s vice chair. Major said, however, that the company was disappointed in its loss on bids for two other packages.
Offerings from Concessions International will include Paschal’s, Proof of the Pudding, Twist by Chef Tom Catherall, Willy’s Mexicana Grill, Fresh2Order, Gabriel’s Desserts, Little Azio Pizza & Pasta and Lotta Frutta.
The Paradies Shops won one of two retail packages for spaces located within Terminal E and the new International Terminal. “We already have a nice presence in Atlanta and this is a great addition,” says Paradies, who says it is exciting to be a part of one of the biggest terminal openings in the U.S.
Paradies’ full award includes CNBC News, The New York Times bookstore, Goldberg’s Deli, SPANX, Pandora, Brooks Brothers, Swarovski, Shades of Time, Soundbalance, Sweet Auburn Market, Brookstone and The Body Shop.
The other retail package winner was LTL ATL joint venture. Other than the Concessions International/H&H joint venture, the four other large food and beverage packages were awarded to HMS Host Corp./Atlanta Chefs joint venture (2 packages); Hojeij Branded Foods Inc.; and Delaware North Companies Travel Hospitality Services Atlanta Partners. Winners of the small food and beverage packages were Atlanta Restaurant Partners; Global Concessions Inc.; Mack II, Inc.; and Vida-Velocity Management LLC.
