Cleveland's airport director wants to create the feel of a mall at Hopkins International Airport by adding more stores and inviting more local businesses to set up shop there.
Airport chief Ricky Smith said Monday that the best way to do that is to hire a development company to attract restaurants, clothing stores and gift shops to Hopkins. The developer would pay for any improvements to the existing 47 restaurants and stores and for the cost of adding 20,000 square feet of retail space that Smith wants.
The city would receive an agreed-upon percentage of revenue from store owners.
"You will not find an economic development opportunity larger than this for some time at the airport," Smith told City Council members at a meeting to discuss terms of new concession agreements at Hopkins.
The current 15-year retail concession contract with HMS Host Inc. expires in August. The food and beverage agreement, also with HMS Host, expires in 2009. The company has run the airport's concessions stores since the early 1980s. Smith will soon invite companies to bid on a 10-year agreement for both the retail and food-and- beverage concessions. He favors hiring a developer. If he does, he proposes to accept bids only from companies operating under the developer model. Smith said he believes this would create more competition and more opportunity for local businesses.
He also said it puts the burden of paying for store improvements and expansion on the developer.
"We want to rely on the operator to make the investment the airport can't make," Smith said.
But his approach would exclude HMS Host, which operates as a management company that owns all of the stores at Hopkins. The company has exclusive contracts with national companies that limit the number of independent businesses that can rent space.
Host also hires only union workers, and union members complained to council Monday that they feared losing their health and pension benefits if HMS Host is replaced. They also said they feared they would make less than their average wage of $7.50 an hour.
Smith promised to make sure workers retain their pay and comparable benefits under a new management company.
"Trust me," Smith said, turning to the room full of union workers gathered at the meeting, "I'm going to do everything in my power to make sure you're better off."
Council passed legislation Monday night that requires the management company to retain the 368 concessions workers and give them a comparable benefits package.
Smith said passengers spend an average of $5.50 each on food and beverages and retail purchases at Hopkins. He said he would like to see their spending double to help lower the costs that airlines pay to the city to help operate the airport.
Host paid the airport $3.78 million from concessions sales last year, according to the company, or about 12.5 percent of $30.3 million in total sales.
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