STRATEGIC PRIORITY: Mobility Solutions, Infrastructure, and Sustainability
AGENDA DATE: December 13, 2023
COUNCIL DISTRICT(S): 2
DEPARTMENT: Department of Aviation
EXECUTIVE: Kimberly Bizor Tolbert
______________________________________________________________________
SUBJECT
title
Authorize an increase to the current 10 percent above street pricing to (1) 15 percent above street pricing for all sit-down restaurants; and (2) 17 percent above street pricing for all fast-casual and quick-serve restaurants for all Food and Beverages and Retail Concessionaires at Dallas Love Field to help mitigate the increased costs of providing products and services to the traveling public and airport employees - Estimated Annual Revenue: Aviation Fund $19,552,251.00
body
BACKGROUND
Pursuant to Resolution Nos. 12-0706 and 12-0707, for all food, beverage, and retail concession contracts for the construction, management, and operation of all units at Dallas Love Field. The contract’s primary terms commenced on November 1, 2014, for all units, with a contract primary term expiration of October 31, 2021, for all retail and quick-serve food and beverage units and October 31, 2023, for all sit-down restaurants. Subsequently, by multiple council-approved amendments, renewal terms (2 years) and extension terms (2 years) extended the expiration dates.
On August 12, 2015, the City Council authorized the amendments to all contracts to allow street plus 10 percent pricing by Resolution No. 15-1535 in addition, based on the concession’s excellent operation throughout the primary term, but especially during the COVID-19 pandemic when airline traffic was significantly reduced, with drastic staffing reductions and sales lost, the concessionaire continued operations to service passengers and airport employees in a very trying climate. Post-COVID recovery progresses but at a significantly higher cost. Wages and hiring costs, merchandise and food costs have increased, and delivery costs and all aspects of operations at the airport have increased the costs of those operations. The Department of Aviation seeks City Council approval to increase the street pricing for all operators at the airport to help mitigate the increased costs of providing products and services to the traveling public and airport employees.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On March 7, 2012, the City Council authorized concession contracts, with renewal options, for the operation of food and beverage concessions at Dallas Love Field Airport - Gina Puente Ventures, Inc., estimated annual revenue of $206,000.00, Dallas Love Field Joint Venture, Ltd., estimated annual revenue of $1,610,000.00, Pop Four Love Field, JV. Estimated annual revenue of $175,225.00, Host International, Inc., estimated annual revenue of $1,657,000.00, HG-Multiplex-Regali Dallas JV, estimated annual revenue of $1,113,728.00, The Grove, Inc., estimated annual revenue of $425,000.00 and Dickey’s Barbecue Restaurants, Inc, estimated annual revenue of $150,000.00 - Total Estimated Annual Revenue: $5,336,953.00 a seven-year and nine-year concession contract, with two one-year renewal options, for food, beverages, and retail services with Air Star Concessions, LTD at Dallas Love Field by Resolution No. 12-0706.
On March 7, 2012, the City Council authorized a seven-year concession contract, with two one-year renewal options, for retail services with Host International, Inc., HG-Multiplex-Regali Dallas JV, and Hudson Retail Dallas JV at Dallas Love Field by Resolution No. 12-0707.
On August 12, 2015, the City Council authorized the First Amendment to allow (1) product pricing at no greater than street pricing plus ten percent (10%) with Gina Puente Ventures, Inc, Air Star Concessions (formerly Dallas Love Field Joint Venture, Ltd.), Air Star -LTS/Marquis-DAL, LLC (formerly Air Star Concessions, Ltd.), Pop Four Love Field JV, Host International, Inc, HG-Multiplex-Regali Dallas JV, The Grove Inc, and Dickey’s Love Field JV LLC (formerly Dickey’s Barbecue Restaurants, Inc.); and (2) $10.37 per hour minimum wage rate, and waived the share costs provision for food court cleaning, third-party inspection and deliveries, and trash removal by Resolution No. 15-1335.
On August 12, 2015, the City Council authorized the City Manager to amend the contracts for Retail Concessions Services at Dallas Love Field to (1) allow product pricing at no greater than street pricing plus 10 percent with WDFG North America, LLC, Hudson Retail Dallas JV, HG-Multiplex-Regali Dallas JV; (2) establish a minimum hourly pay rate of $10.37, defined as a living wage, for non-managerial retail concession employees; and (3) remove the share costs provision, currently capped at three percent of gross sales, for Sally Port (product receipt, security inspection and clearance, and delivery from the third party operator at the central receiving facility), and for trash removal services by Resolution No. 15-1336.
FISCAL INFORMATION
Estimated Annual Revenue: $19,552,251.00
OWNERS
Air Star Concessions, Ltd, Air Star-Bush-LTS Marquis DAL, LLC, Team Joint Venture, LLC, Bush AirStar LTS Marquis DAL, LLC, and Air Star LTS/Marquis DAL LLC
Gilbert Aranza, President of the Managing Partner
Hudson Dallas Love Field Concessionaires, LLC
Courtney Thornton, Executive Vice-President, Government & External Affairs North America
Host International, Inc.
Anthony Alessi, Vice-President, Business Development
Dickey’s Bar-B-Q
Roland Dickey, Jr., President
Pop Four Love Field JV, LLC (Four Leaf Ventures)
Luis Ibarguengoytia, President
Creative Bar Concepts, LLC
Charles Bush, President
The Grove, Inc.
Nina Madonia, President/Chief Executive Officer
CBC-SSP America DAL, LLC (as assignee to the Puente Enterprises, Inc. Contract)
Pat Murray, Executive Vice-President