STRATEGIC PRIORITY: Transportation & Infrastructure
AGENDA DATE: December 13, 2023
COUNCIL DISTRICT(S): 2
DEPARTMENT: Department of Aviation
EXECUTIVE: Kimberly Bizor Tolbert
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SUBJECT
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Authorize a Fourth Amendment to the concession contract with Air Star-LTS/Marquis DAL, LLC (Chili’s) for food and beverage concession services at Dallas Love Field Airport to exercise a seven-year renewal term to the contract - Estimated Revenue: Aviation Fund $697,363.00
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BACKGROUND
On August 18, 2014, an Assignment and Assumption Agreement was entered between Air Star Concessions II, LTD (as Assignor) and Air Star-LTS/Marquis DAL, LLC (as Assignee).
On March 7, 2021, the City Council authorized a concession contract with Air Star-LTS/ Marquis DAL, LLC, for a food and beverage concession contract for the construction, management, and operation of Chili’s (C2396) by Resolution No. 12-0706. The contract’s primary term commenced on November 1, 2014, for the unit, with a contract’s primary term expiration of October 31, 2023, for Chili’s. In addition, based on the concession’s excellent operation through 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, hiring costs, merchandise, and food costs have all increased, along with delivery costs and all aspects of operations at the airport have increased the costs of those operations. As enplanements continue to rise, the food & and beverage outlets must be improved. To this end, Air Star-LTS/Marquis DAL, LLC projects to spend $125,000.00 on capital improvements and rebranding of some units. The Department of Aviation seeks City Council approval to exercise a seven-year renewal term to the Air Star-LTS/Marquis DAL, LLC contract.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On March 7, 2012, the City Council authorized a concessions contract, with Air Star Concession, LTD. (formerly Dallas Love Field Joint Venture), with two one-year renewal options for food and beverage services at Dallas Love Field Airport by Resolution No. 12-0706.
On August 12, 2015, the City Council authorized the City Manager, to execute the First Amendment to the contract with Air Star-LTS/Marquis DAL, LLC that allowed product pricing at street pricing plus 10 percent, established a minimum wage of $10.37, and removed the shared cost provision of the contract by Resolution No. 15-1335; and
On October 24, 2018, the City Manager authorized the Second Amendment to the food and beverage concession contract with Air Star-LTS/Marquis DAL, LLC, previously approved by Resolution No. 12-0706 on March 7, 2012, to add approximately 500 square feet of non-contiguous space for patio seating to the existing Chili’s restaurant at Dallas Love Field by Resolution No. 18-1484.
On October 13, 2021, the City Council authorized the City Manager to execute the Third Amendment to the Air Star-LTS/Marquis DAL, LLC food and beverage concession contract at Dallas Love Field, approved as to form by the City Attorney, in order (1) to exercise both one-year renewal terms, and (2) add two extension years to the contract by Resolution No. 21-1648.
FISCAL INFORMATION
Estimated Revenue: Aviation Fund $697,363.00
OWNER
Air Star-LTS/Marquis DAL, LLC (Chili’s)
Gilbert Aranza, President of the Managing Partner