Council panel on Love Field no-bid contracts leaves members largely unmoved

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Jun. 3--The final meeting of a special City Council committee set up to examine two no-bid contracts at Love Field left members largely unmoved from positions they had staked out when they set up the committee in late April.

Mayor Tom Leppert and several other council members pushing to open up all concession space at the airport to a competitive bid questioned why the city would offer multi-million dollar contracts -- with terms of at least 16 years and up to 19 years -- without accepting a competitive bid.

Meanwhile, proponents of the no-bid deals -- largely composed of the council's southern and western representatives -- urged passage of the contracts, saying the current concessionaires have earned the contracts by enduring hardships and providing quality service.

Prior to the meeting's start, council member Ron Natinsky noted that the committee had already spent 6 hours discussing the deals.

"I'm not sure that's been all that fruitful at the end of the day," he said.

The council is closely divided on the issue. It's unclear when the council will take a final vote on the contracts, although many council members have said they don't want to issue to drag past their July break.

The no-bid contracts have come under particular scrutiny because they are controlled by politically-connected firms.

The food contracts are held by Gilbert Aranza, a longtime restaurateur and donor to many council members.

The newsstand and bookstore contract is controlled by Hudson Retail Dallas, a company that state Rep. Helen Giddings holds a 25 percent stake in. A 15 percent stake in the company is held by a trust that controls the assets of U.S. Rep Eddie Bernice Johnson.

Leppert has led a charge to open up the contracts for bid. Under a plan crafted by the city staff and a consulting firm, more than half of all concession space at Love Field would go to the current concessionaires. The remaining space would be opened up for bid. The concessionaires would have their current deals extended until a renovation of Love's terminal is complete in 2014. A new 12-year contract with a 3-year option would then take effect.

Leppert questioned Wednesday whether competing firms would be interested in bidding on the space in the new terminal that wasn't handed over in the no-bids deals.

He quoted from letters from two concession firms that stated they would have no interest in the space set aside for bid.

Matthew King, of Delaware North Companies Travel Hospitality Services, wrote Leppert to say that his company would not pursue a bid.

"The current concessionaire has been provided the best locations. ..The failure to employ a truly fair, open and transparent competitive process for all of the concession space is not a sound business practice, runs counter to Dallas' longtime reputation as a city open for business and discourages companies from pursuing business with the city of Dallas," King wrote.

Assistant City Manager A.C. Gonzalez said that the space set aside for bid is valuable.

"This characterization of all the good spots being given to incumbents is one that is subjective. What we tried to do in that division or allocation would be one that was fair," he said.

Gonzalez, Dallas Aviation director Dan Weber and three consultants from Unison affirmed that they believe the contracts they crafted represent the best deal for the city.

Mayor Pro Tem Dwaine Caraway suggested Love Field would be in dire shape if the contracts weren't granted and the current concessionaires packed up and walked away.

Gonzalez tried to say that he has had discussions with the current concessionaires about staying through construction, but Caraway cut him off.

"I don't want that answer..What would happen if they leave?" Caraway asked.

"We wouldn't get to that point. I don't consider that to be an option. It would be our intent to be seamless as far as customer service was concerned," Weber said.

Council member Steve Salazar said that he believes the city would take on added risk by bidding out the contracts. The current concessionaires have been good for the airport, he said.

"If this is less risk for the city, as the consultants have said, I think it's a prudent thing to move forward" he said.

Natinsky asked Gonzalez if the staff could help find some compromise on the contracts in case the council votes down the deals he proposed.

He said he will try but doesn't see an easy consensus.

"We have worked very hard to try to get to a solution.... Having said that, in moving forward everybody would have to understand that in order to get a consensus it would not look like one side would have achieved everything they are looking to achieve in terms of openness or everything for the incumbents," he said

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