Douglas and Devine were in town Wednesday to brief members of the airport panel's lease committee. Three of the seven commissioners present at the meeting had more questions than company and airport administrators could answer, and the lease panel forwarded the proposal to the full commission without a recommendation.Commissioner Bob East wondered if the proposed lease extension amounted to a new lease, which would require the airport to seek proposals from other concessionaires.
"Can we do that legally?" he asked at the Wednesday meeting. "We're essentially giving them a new lease without competition." Lease extensions in exchange for new investment is common in the industry, Ross said.
By Thursday, commission attorneys had cleared the proposal of any potential legal snags.
"There are no prohibitions against extending the HMSHost agreement," said Carolyn Witherspoon, a Little Rock attorney and the commission's chief counsel.
Tom Schueck, another commissioner, expressed concern that under the proposal the commission would be unable to revisit the lease until 2018 and wondered if the lease couldn't be for a shorter period, such as seven years instead of 10.
"We wouldn't be able to recoup our investment in that short of a term," Douglas said.Commissioners also preferred a "name-brand" sit-down restaurant rather than the one the company proposed, which would have an Arkansas flavor.
The commissioners visited several airports earlier this year as part of the commission's deliberations on whether to build a new terminal or renovate the existing one. The cost of a new terminal has been estimated at $230 million. The offerings they saw at airports include Chili's Grill and Bar and Friday's restaurants, which the commission members suggested would help attract customers.
"They know what they are going to order at Friday's," Schueck said. "I know I do." Douglas and Ross said those brands require a level of passenger traffic that Little Rock National might not meet. About 2.5 million passengers go through the airport annually.
"The economics would require a different set of deal terms," Douglas said. "We will look at that." Ross said the work required under the proposed concession changes wouldn't be too much of a disruption to passengers.
"The one that would be of the greatest concern is the Starbucks in baggage claim," Ross said. "That's mainly because of the utility connections" that would be needed.
This article was published 10/16/2007
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