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HomeMy WebLinkAbout1993-04-09 Airport Committee Minutesr� MPY-19-9s WE➢ 22:18 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 MAY_L�_S3 WED 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