Wednesday, September 19, 2018
Business

Critics take aim at Tampa International Airport's concessions contracts

TAMPA — The proposals are in. The bids have been ranked. After eight months, the process of choosing what people will eat, drink and buy at Tampa International Airport is almost at an end.

The airport's overseer, the Hillsborough County Aviation Authority, will pick the winning bids on June 4.

But critics of the process are starting to speak up.

They question the airport's commitment to minority-owned and locally owned businesses, the diversity of the selection committees and even whether a board member should recuse himself from voting because a bidder donated to his re-election campaign.

The Tampa Organization of Black Affairs, or TOBA, monitored the process the airport used to evaluate and rank all the bids for new bars, restaurants and shops. The chair of its economic development committee, James Ransom, said they have several concerns.

"The goal for us is to have African-American companies … be a part of this incredible opportunity for prosperity," he said.

Airport spokeswoman Janet Zink defended the concession selection process. If the board approves the top bids, she said, the number of minority-owned firms doing business at the airport will jump from three to 15.

"The airport is committed to minority contracting and very proud of our accomplishments," she said. "In the concessions program, what's been proposed is definitely an increase in minority participation."

• • •

Airport officials said they designed the concession bid process to ensure that minority businesses will get a share of every new contract that will be awarded.

Minority businesses must own a 29 percent stake in the groups bidding on food and beverage concession packages. The ownership stake for retail bidders is 23 percent.

That goal should increase the number of minority-owned firms at the airport, officials said, and most of the ownership groups exceeded those goals.

The stakes are high: Tampa International is undergoing a $943 million expansion and renovation that will change everything inside and out by 2017.

Concessionaires were invited to bid on packages of restaurant and retail spaces throughout the airport. The selection committees ranked each bid on criteria such as concept, layout, experience, business plan and the potential to generate revenue for the airport.

But Ransom said TOBA is concerned that none of the No. 1-ranked prime concessionaires are minority-owned businesses. Instead, those businesses were relegated to being subprime contractors who partnered with bigger prime contractors.

TOBA was especially concerned that a bid made by Atlanta's Concessions International, LLC, an experienced prime concessionaire operated by an African-American family, was buried in the rankings given its track record.

"That is a curiosity for us that we will evaluate and investigate," Ransom said.

TOBA also wondered what guarantee Tampa International has that the larger prime contractors won't drop its minority-owned partners after winning the bids.

"Historically, in many cases," Ransom said, "this is what happens."

But airport officials said that guarantee is built into its concessions contracts: Prime contractors must have permission from the Aviation Authority to fire a minority-owned subprime partner.

Prime concessionaires can even have their airport contracts suspended or terminated if they're not in compliance with the airport's minority contracting rules.

• • •

The African-American businessman with the best shot at becoming a prime concessionaire is George Tinsley Sr.

The Winter Haven businessman had two decades of experience running fast-food franchises when he got into the airport concessions business in 1995. Now he runs one of the nation's most successful TGI Fridays there.

But his days as a prime concessionaire running his own airport restaurant may be numbered. His restaurant concepts for a set of airport spaces known as "Package 4" were ranked second by the selection committee.

He thinks he'd be ranked No. 1 if the process gave greater weight to bids from local businesses.

"I mean we've been here 20 years," he said. "We've learned the business. We've done all the things you're supposed to do."

Being a prime concessionaire requires a seven-figure investment up front. The big players, the national concessionaires, can afford that. That's why smaller businesses teamed up with them on the bids.

But Tinsley said he and a financial backer are making that seven-figure investment themselves in a bid to be the airport's only local prime concessionaire.

"If you come up with the capital and put yourself in the position to do that," Tinsley said, "you should be rewarded if you're local and in your own back yard in your own airport."

The airport designed the bid process to encourage concessionaires to include "local flavors" — local bars, restaurants and business owners.

But airport officials said federal law prohibits them from favoring local companies when awarding contracts.

Tinsley is a subprime contractor partnered with prime concessionaires who hold top rankings in two other bid packages, so he'll likely stay at the airport. But nothing beats being a prime, he said.

"What a wonderful thing it would be if a local company acting as a prime were to come out on top," Tinsley said. "That's unheard of."

• • •

Ransom said his organization has a particular issue with the top-ranked bidder for the concessions package to which Tinsley finished second.

The winning bid was turned in by Hojeij Branded Foods, Inc., a veteran concessionaire that has a complicated history bidding for airport contracts.

Hojeij's winning airport bids have resulted in litigation in Orlando and controversy in Atlanta. In 2012, the Atlanta Journal-Constitution reported that Hojeij was one of several concessionaires that made political donations to city officials who oversee Hartsfield–Jackson Atlanta International Airport.

The report linked Hojeij to $27,000 in campaign contributions made to Atlanta Mayor Kasim Reed.

That's become an issue once again. Last year Hojeij donated to the re-election campaign of a local politician: Hillsborough County Commissioner Victor Crist, who sits on the Hillsborough Aviation Authority board.

According to records, Crist received $8,000 in donations on April 30, 2014, from the Atlanta company, members of the Hojeij family and companies that shared Hojeij's Atlanta address. Other companies vying for airport contracts have also made donations to Crist.

Hojeij could not be reached for comments.

The airport said the donations played no role in how bids were ranked because Crist played no role.

"The evaluation committee functions completely separate from the board," Zink said. "That's irrelevant."

"I haven't been involved in the selection process at all, in any way, shape or form," Crist said, adding the donations would also not affect his upcoming vote.

TOBA thinks Crist should recuse himself from the June 4 vote. Tinsley doesn't, but he did say this:

"It's pretty obvious that it doesn't look good."

• • •

The airport convened two committees to vet and rank the concessionaire bids. Four women looked at food and beverage bids, and two men and two women looked at retail offerings. But both groups had the same problem, TOBA said: There were no African-Americans on either committee.

"It could make a difference in the process," Ransom said. "If diversity is a goal, to not have diversity on the committee could have an impact."

The airport acknowledged that was an issue.

"Our evaluation teams could have been more diverse," Zink said.

In 2013, Ransom said that Tampa International CEO Joe Lopano pledged that minority-owned firms would share in the profits from the airport's billion-dollar expansion. TOBA intends to hold the CEO to his word.

"We know that competition means you compete against other companies," Ransom said. "But the results should be the diversity that Joe Lopano committed to."

Zink said the airport is on course to fulfill that commitment.

The airport currently has contracts with two African-American-owned businesses. But if all the top-ranked concessions bids win on June 4, Zink said, that number will go up to seven African-American-owned firms.

Minority-owned businesses now report $15 million in gross sales at the airport. Under the new contracts, Zink said, that's projected to rise to $50 million by 2018. But Tampa International officials also realize that there will be many unhappy bidders after June 4. They're prepared for criticism, rancor — and even litigation.

"We would hope that we're not going to have to deal with (lawsuits)," Zink said. "But it's always a possibility given a large contract like this."

Times researcher John Martin contributed to this report. Contact Jamal Thalji at [email protected] or (813) 226-3404. Follow @jthalji.

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