The second of two lucrative contract extensions to operate businesses inside Palm Beach International Airport will be considered at Tuesday's county commission meeting.
The Paradies Shops, based in Atlanta, was the sole company to submit a proposal, which seeks to extend its presence at PBIA through 2022. It has run the newsstands and retail stores at the airport since 1987.
But the commission's approval of the contract would signal the end of a minority-run company's longtime presence at the airport, part of a federal requirement that minorities and women receive 25 percent of the retail concession's revenue and operate 25 percent of the total retail space.
Earlier this year, Paradies filed a lawsuit against JL Unlimited, a company owned by Riviera Beach resident Lou Ella Jordan and West Palm Beach resident Jackie Haygood that has operated at the airport for 23 years.
Paradies' dispute with JL is over the amount of money JL believes it was due from Paradies over a number of years. During the years JL did not generate 25 percent of the total concession revenue, Paradies would pay JL the difference, according to the terms of their agreement.
The companies' differences led to the county airports department putting the retail concession contract out to bid, airport officials said.
"The cleanest thing to do was just put retail out on the street and start a new contract," Airports Director Bruce Pelly said. "The bottom line is they (Paradies and JL) couldn't go through together."
Paradies picked two other local companies to fill the minority requirement, though it's unclear whether they will operate their own shop at PBIA, as JL has done.
Paradies officials were unavailable for comment Friday, but Pelly acknowledged "it will be a different setup" that he says will meet federal muster. Paradies' proposal indicates the new minority representatives, Thyla Echols Starr and Stacy Bryant, "will be actively involved in the day-to-day operations of the concessions."
Pelly said it's Paradies' choice to contract with the minority firms it desires.
But JL representatives said the airport made no effort to back their company. While Paradies' retail space at the airport expanded over the past 10 years, JL's didn't grow in the same way to meet the 25 percent retail space requirement, said F. Malcolm Cunningham, Jr., a lawyer representing JL.
"The county stood around and allowed that to happen," he said.
Concessions pull in $97 million
Across the country, running an airport's restaurants and shops is big business for both the concessionaires and the airports.
Paradies' revenue at its stores, including the PGA Tour Shop, Baby Boomers and several newsstands has totaled more than $97 million since 1996.
Host International Inc., based in Bethesda, Md., reported more than $91 million in revenue since it obtained PBIA's food and beverage contract in 1999.
Those two contracts have brought more than $30 million into airport coffers during that time.
Paradies is required to invest at least $5.2 million during the length of its contract, if commissioners approve it. It includes opening new stores FAO Schwarz and :10 Minute Manicure.
Without discussion, county commissioners in August extended Host's contract at PBIA from 2014 to 2024. That contract was never put out to bid, but Host will make investments at the airport.
"The bottom line is there really aren't that many operators in this business," Pelly said. "If you've got a good operator, they're doing a good job, they're going to pay you a fair amount in return ... why wouldn't you extend the contract?"
Contract would end next summer
Paradies believes it owes JL $327,000 over the years JL did not meet the 25 percent threshold in revenue, while JL believes the figure is more than $2 million.
While the two partners in JL -- Haygood and Jordan -- have not gotten along personally in recent years, both say it has nothing to do with their quality of business at the airport.
Palm Beach International Airport Director Bruce Pelly doesn't like controversy over the airport's two main concessionaires, and bidding the lucrative contracts can lead to messy political fights...
The proposed shop is one of 16 airport news and gift stands in the United States capable of generating more than $5 million in revenue annually.
The changes would almost double the amount of retail space and add about 50 percent more restaurant space to the airport.
HMS Host and The Paradies Shops shared $18 million renovation tab. Contracts run until 2018.