Love Field no-bid concessions contracts defeated

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Aug. 19--A deeply divisive fight over concessions contracts at Love Field culminated before the Dallas City Council on Wednesday, ending in the defeat of two no-bid contracts and the adoption of a plan to open for bid all restaurant and retail space at the city-owned airport.

After hours of discussion, a racially split council voted 8-7 to reject a proposed deal that would have given -- without a competitive bid -- more than half of the concessions space in a renovated Love terminal to the airport's current vendors for a term of up to 18 years.

Then, in a victory for Mayor Tom Leppert, the council voted 11-4 to accept a plan to bid out all concessions space at the airport when the new terminal opens in 2014.

The key vote in the 8-7 decision came from council member Angela Hunt, who in June asked the council to put off action on the airport while she considered the deals in question.

On Wednesday, she said she decided the best thing for Love Field would be to open the terminal's concessions to bid, with some incentives for the current vendors to stay at the airport during a three-year renovation and expansion period.

Hunt said the full bidding plan is not perfect, but it "creates a management model that has worked at other airports quite successfully by creating a fully bid-out process."

The concessions contracts have long been a source of controversy at City Hall, complicated by the political connections of the vendors who have done business at Love Field for years.

The airport's current retail vendor, Hudson Retail Dallas, is partly owned by state Rep. Helen Giddings and a trust that controls the assets of U.S. Rep. Eddie Bernice Johnson.

The airport's food concession company, Star Concessions, is owned by longtime political donor Gilbert Aranza.

Under a deal proposed by city staff and unanimously approved by a council committee, Star and Hudson would have received more than half of all concession space in Love's renovated terminal, with the remaining space put out for bid.

In April, Leppert began to work to stop those deals from being approved, calling them too sweet for the current vendors and bad for the city's image as a fair place to do business.

The council twice put off votes on the deals as Leppert worked to gather support for a plan to bid all the space.

He said Wednesday that the council had made the right decision.

"We've signaled to people what is important, and that's doing things in an open and transparent way. ... And I think we showed that business at City Hall can be done in the right way," he said.

Leppert was able to gather support for the open-bid plan from three minority council members: Delia Jasso, Dwaine Caraway and Tennell Atkins.

Atkins and Caraway said that after the deals proposed by city staff were defeated, it was time for the council to move on.

"It's not a fun deal for me today. But it is something we are even now going to move forward with," Caraway said.

Moving on could be difficult, however.

Several council members were angry over the way the contracts debate played out.

Council member Vonciel Jones Hill, who voted against Leppert's plan, said the mayor has implied publicly that she acted corruptly in backing the deals that favored Hudson and Star.

"I have been called in this discussion corrupt, dishonest, unintelligent, etc. I have been called publicly everything except a child of God. And I am none of that. I am not corrupt," she said.

Council member Carolyn Davis said she regretted supporting Leppert in votes on the city's convention center hotel and an ethics-reform ordinance.

"Mayor, I was a swing vote for you on two things. ... If I knew it now, I would have went the other way," she said.

"You are going to need me again. You are going to need me. And you are going to need my vote on something else, where I'm going to be a swing vote."

City Council member Ron Natinsky urged the council to move on from the vote, saying there is other business to be done.

"This has been a long, hard process for everybody sitting in this room. It is just a vote today, folks. It is not the end of anything," he said.

Council member Ann Margolin, one of the most vocal opponents of the no-bid contracts, said she wasn't entirely pleased with Leppert's plan because it gives too much to the current vendors. Under the plan, the current vendors would be asked to stay at the airport during construction. If they agree, they get the right of first refusal to 27 percent of the concession space at the new airport. The space would be bid, but the incumbents would have the right to match the winning bid and take the space.

"If I was doing this the way I would like to do it, it would be opened [for bid] without any preference whatsoever," Margolin said.

It's unclear whether the current vendors will choose to stay in the airport during construction or bid on space in the new terminal.

Aranza said he will have to study the plan.

"We'll just have to do a lot of thinking. I'm certainly going to look forward to visiting with [Assistant City Manager A.C. Gonzalez], since he hasn't had the opportunity to visit with me lately," he said.

A Hudson representative, Marcos Ronquillo, told the council that he was astonished by the way it has handled the concessions matter, calling it "a heck of a way to run a city."

"This is a city manager form of government. Not a Fortune 500 company," he said in reference to Leppert's involvement.

After the meeting, Ronquillo said Hudson will consider where to go from here.

"We had 20 minutes to look at [the Leppert plan], essentially. And obviously we'll consult with our client, confer with our client, and our client will make a business decision in terms of what they want to do," he said.

There won't be much time to decide.

Gonzalez said that in the next 30 days, the city will seek a commitment from Star and Hudson to remain at the airport during the construction period.

If a deal cannot be reached, the city will open all of the concession space at the airport to bid both during and after construction. The current vendors' contracts expire in June 2011.

HOW THEY VOTED

On the proposal to give the airport's current vendors more than half of all concession space in Love's renovated terminal without a competitive bid.

FOR: Mayor Pro Tem Dwaine Caraway, Deputy Mayor Pro Tem Pauline Medrano, council members Delia Jasso, Vonciel Jones Hill, Steve Salazar, Carolyn Davis and Tennell Atkins

AGAINST: Mayor Tom Leppert, council members David Neumann, Sheffie Kadane, Jerry Allen, Linda Koop, Ron Natinsky, Ann Margolin and Angela Hunt

MOTION FAILS 8-7

On the proposal to open all concessions space at the renovated terminal for bid, with incentives for current vendors.

FOR: Leppert, Caraway, Jasso, Neumann, Atkins, Kadane, Allen, Koop, Natinsky, Margolin and Hunt

AGAINST: Medrano, Hill, Salazar and Davis

MOTION PASSES 11-4

THE WINNING PROPOSAL

--Every concession space at Love Field's renovated terminal will be opened for bid.

--If the airport's two current vendors agree to stay through 2014, while the terminal is rebuilt, they will each have a right of first refusal to 27 percent of space in the new terminal but must match the winning bid for the space.

--The right of refusal is based on the value, not the square footage, of space as determined by the city staff.

--The space available to the current vendors under the right of refusal will be selected at random. If it is accepted or rejected, it counts against the 27 percent allotment.

--All food and retail prices at the new airport must be set at "street" value, not inflated.

--Term lengths are 8 to 10 years for all restaurant contracts and 5 to 7 years for all retail stores, with extension options of up to two years.

--Bids must be scored on minority/woman participation, financial strength, value to airport, creativity, experience and incumbency.

--Brand names will be emphasized.

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