HomeMy WebLinkAbout1993-04-09 Airport Committee Minutesr�
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AIRPORT COMMITTEE MEETING
FRIDAY, APRIL 9, 1993 - 7:30 AM
CITY COUNCIL CHAMBERS
Present: William Shubert, Chair
Richard Stone, Councilor
William Cohen, Councilor
Edward Barrett, City Manager
Bob Ziegelaar, Airport Director
Richard Pas2y0, Airport Sales Manager
David Pellegrino, Purchasing Agent
Bruce Shibles, Assistant City Attorney
George singal (Esq), "Mr. Paperback"
William Wright, "Mr. Paperback"
The meeting was opened at 7:30 AM with all above participants in
attendance. The agenda was handled in the following sequence:
1. Newsstand Concession (Selection).
The Airport Director briefed the Committee about the proposals
received (3) in response to the Airport's RFP. All three
proposals were deemed responsive to the criteria Outlined
in the RFP. Mr. Ziegelaar explained that the selection of
the preferred proposal was difficult inasmuch as there was a
choice between a longstanding successful local vendor and
two highly competent national Or international vendors
with a great deal of airport concession experience.
Mr. Ziegelaar further explained that he and Mr. Pellegrino
had come to the same conclusion, nl, that on the basis of
financial considerations as well as that of federally
mandated "Disadvantaged Business Enterprise" criteria,
the proposal by Fenton Hill (Florida) was the most responsive
and, therefore, was the one he would recommend for selection.
He further explained that Fenton Hill's offer to spend up to
$300,000 in store improvements was an important aspect of
this proposal because it would complement the airport's 12 million
dollar investment in terminal construction and upgrading.
Mr. Cohen questioned whether or not the Airport would be free
to negotiate further on the basis of the received proposals,
to which Mr. Pellegrino answered in the affirmative. Mr. Cohen
suggested that it might make sense to determine if the local
vendor, Mr. Paperback, would be prepared to make an investment
in its facilities to a similar extent as the improvements
offered by the ether two vendors. Mr. stone also expressed
his preference for working with local Vendors whenever
possible, providing they can meet the terms offered by the
competition. He questioned the significance of the DHE
aspect in the selection process and asked whether the DBE
criteria would cause the airport to favor the qualifying
firm over the local firm, even if all other criteria were
equal. Mr. 2iegelaar responded by saying that the FAA
requires airports to make a "best faith effort" to meet DHE
requirements in all cases where vendors or concessionaires
are selected and that if it were perceived to be clearly
circumventing the DBE regulations it would jeopardize the
airport's 2 million dollar annual grant allocation.
Mr. Pellegrino further explained that DBE can be met In
various ways, that the regulation cannot be used to force
organizational changes upon vendors and that the FAA will
conduct periodic audits to determine compliance levels
with the regulations.
At this point, Mr. Sinal asked to respond on behalf of his
client, Mr. Paperback. He pointed out that Mr. Paperback
has been the newsstand concessionaire since the earliest
days at the airport and has remained a loyal contributor
to the airport's finances through good years and bad and
that it would not seem fair to eliminate them from continued
Participation in the airport's business now that times are good.
He further stated that Mr. Paperback has always safeguarded
pricing levels at the airport, maintaining "downtown prices"
at the more expensive airport location. In addition, he
asked for recognition of Mr. Paperback's long-term contributions
to the local economy and labor market and its overall investments
in its local stores. He suggested that the City not look at a
possible Short-term gain inasmuch as anyone can gain entry by
offering premium but that it focus on long-term stability
instead. He expressed his belief that Fenton Hill had erred
in its proposal and by offering a base rent of $105,000 in
addition to the proposed overrides would and up losing
monies consistently over the five-year term.
Mr. 2iegelaar responded that some of the points raised by
Mr. Singal required further elaboration. He pointed out
that like Mr. Paperback, Fenton Hill (through its sister
corporations) had made substantial investments in Bangor.
He estimated the organization's investments at the airport
at $950,000 to date. He stated that he agreed with Mr. Sinal
that Mr. Paperback had been an excellent and Stable tenant
but that any financial sacrifices the company might have made
in the past would have been amply rewarded during the most
recent five year period, when the airport has seen its best
business levels ever. He also explained that the airport's
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focus is not a short-term one but that as its "business
manager", he has to be concerned
ve
rned about the long-term revenue
stream because a return to taxpayer subsidies is not an
acceptable alternative. He indicated his interpretation of
the Fenton -Hill proposal differed from Mr. Singal's view
and Mr. Pellegrino offered to review and compare Mr. Singal's
figures with his own.
Mr. Siegal explained that if Fenton Hill were to receive
the newsstand concession, it would give the company a
monopoly in the retail business at the airport which would
likely result in higher prices. He further stated that
Fenton Hill's price list, as submitted, diff indicate
increased pricing levels. He also expressed his belief
that Fenton Hill Florida's DBE status was achieved as a
result of listing ownership in the name Of a Spouse of one
of the owners of the overall Fenton Hill Group, which,
while it clearly met Federal regulations, made its validity
for selection considerations somewhat questionable.
Mr. fiegelaar responded by saying that he agreed with
Mr. Sinal that Fenton Hill would control all retail sales
other than food services, if they were to be awarded the
concession rights. While he did consider that to be a
possible negative factor he said that he also believed
that market forces, both in Bangor and at other airports,
would ultimately determine pricing levels.
Mr. Stone argued that while he prefers doing business
with local vendors, he did not accept Mr. Singal's views
regarding possible hardship on the part of Mr. Paperback.
chairman Shubert requested further clarification regarding
the DBE issue as well as the corporate structure of Fenton
Hill. He wondered specifically what would happen if the
DHS issue were considered not to be of overriding importance
by the airport. Mr. Pellegrino stated that the "best faith
effort" was the key issue and that the FAA considers an
airport's overall performance with respect to compliants
With DBE regulations.
Mr. Cohen proceeded to move that the Airport contact
Mr. Paperback regarding possible improvements to its offer,
specifically With regard to physical improvements to the
shopping spaces involved. Mr. Stone seconded the motion.
Upon being asked if this would present a problem for him,
Mr. Eiegelaar responded by saying that ultimately he would
like to see improved facilities to match the other terminal
areas, as well as a fair financial return to the airport
for the concession rights. He further indicated that he
wanted to consult Mr. Pellegrino about the appropriate
method to proceed.
2. Limousine concession.
Mr. Ziegelaar requested approval from the Airport Committee
to award an exclusive contract for limousine services to
Mrr. Glenn Craig who has approached the airport with a plan
to establish an 'Airport Shuttle" service. Mr. Ziegelaar
indicated that while several' rties had approached the
airport from time to time, no of theme had produced any
tangible results. All of the previous proposers had attempted
to operate in conjunction with existing services such as wedding
limousine operations, typically utilizing "stretched limo's".
Mr. Craig is investing in passenger vans and plans to operate
both scheduled and "ad hoc" services, primarily to outlying
areas such as Ellsworth, Har Harbor, Castine, etc.
Mr. Ziegelaar stated that it would be very beneficial for
the airport to have a reliable limousine service because
it would effectively complement the overall package of
transportation services and would also help the airport in
increasing traffic.
Upon brief debate about the City's procedures regarding
exclusive awards, the Committee voted unanimously to
allow the airport to establish a contract with Mr. Craig.
3. General Briefing.
The Airport Director indicated that he had received plans
from Fenton Hill for the interior lay -out and finishes of
the Duty Free concession in the Transit Area of the
International Terminal. The projected investment exceeds
$200,000.
He also briefed the Committee on his efforts to attract a
developer for the airport's former steam plant which has
become a derelect facility, located along Maine Avenue.
He explained that he is attempting to encourage a developer
to remove the asbestos and boiler facilities in exchange
for a long-term lease and the right to develop the building
for industriallcommercial purposes. This would add a building
to the city's tax rolls, eliminate an eyesore and prevent
out-of-pocket expenditures for the city.
The meeting was adjourned at s13o AM