REPORT TO THE CITY COUNCIL
FROM: HENRY THOMPSON, Director of Aviation
Airports Department
BY: MELISSA GARZA-PERRY, Airports Properties Manager
Airports Department
SUBJECT
Title
Actions related to Bid File 12300507 soliciting proposals to manage and operate Food & Beverage Concessions and News & Convenience Concessions at Fresno Yosemite International Airport (FAT). (Council District 4)
1. Award a fifteen-year term Agreement to SSP America, Inc. dba SSP America FAT, LLC, for Food & Beverage Concessions (F&B) at Fresno Yosemite International Airport (FAT) and authorize the Director of Aviation (Director) to execute the contractual document(s) (Bid File 12300507) (District 4); and
2. Award a fifteen-year term Agreement to Hudson Group Retail, LLC, dba HG Fresno Concessionaires JV, for News & Convenience Concessions (N&C) at Fresno Yosemite International Airport (FAT) and authorize the Director of Aviation (Director) to execute the documents (Bid File 12300507) (District 4). The potential revenue of both contracts is $1,295,045 annually. Total anticipated revenue during the full term of both contracts is approximately $19,425,673.
Body
RECOMMENDATION
Staff recommends that City Council (Council) award a fifteen-year term Agreement to SSP America, Inc. dba SSP America FAT, LLC, (SSP) for Food & Beverage Concessions. Staff also recommends that Council award a fifteen-year term Agreement to Hudson Group Retail, LLC, dba HG Fresno Concessionaires JV (Hudson), for News & Convenience Concessions at FAT; and authorize the Director of Aviation to execute all documents related to bid file 12300507.
EXECUTIVE SUMMARY
The City of Fresno, Airports Department (Airports Department), solicited proposals through the Request for Proposals (RFP) competitive bid process for both Food & Beverage (F&B) and News & Convenience (N&C) concessions at FAT’s terminal. The current concessions program at FAT have been in place for more than 20 years. Since the introduction of the current program, passenger traffic has grown exponentially (three times). The current programs reached their terms’ end dates on December 31, 2022. Consequently, the Department felt this would be a great time to introduce a new, locally inspired, concessions program.
There are two individual Agreements being requested for approval F&B and N&C. Each will have a term of fifteen years. The current rates are $40.00 per square foot. (annually) for usable concession space, and $20.00 per square foot (annually) for support, office, and storage spaces. In addition, these proposed rates will also be subject to annual Consumer Price Index (CPI) adjustments, which are not to exceed 5.00% annually. The Department is also proposing a 10.00% fee for all gross revenue earned by each concessionaire. The Evaluation Committee reviewed all proposals, conducted interviews with the bidders, and determined the best fit for FAT’s terminal based on each proposer’s bid.
The Evaluation Committee (Committee) was comprised of the following individuals: Melissa Garza-Perry, Airports Properties Manager; Michael Vasquez, Airports Properties Supervisor; Marcos Ayala, Airports Properties Specialist II; Nicholas Conley, Airports Properties Specialist II; Richard Madrigal, Airports Projects Supervisor; Sevan Ghazarians, Supervising Airports Operations Officer, Angela Hourigan, Manager, Properties & Commercial Development at Sacramento County Department of Airports and Roxann Favors, Assistant Aviation Director/Chief Revenue Officer at Phoenix Sky Harbor International Airport.
Through a comprehensive review and interview process, guided by the Purchasing Division, the Committee determined that SSP presents the best proposal for F&B Concessions and Hudson presents the best proposal for N&C Concessions at FAT.
SSP met the goals and criteria set forth in this RFP that is needed to implement a new F&B concessions program that is “top tier” for FAT passengers. SSP proposes well-known, local food programs that will provide FAT’s passengers with healthy and diverse dining options throughout the day and night.
Hudson met the goals and criteria set forth in this RFP that is needed to implement a new N&C concessions program that is also “top tier” for FAT passengers. Hudson proposes nationally and locally recognized products that will provide FAT’s passengers with reputable brands related to news, convenience, retail, gift, and travel essentials.
The current F&B and N&C contracts ended on December 31, 2022. Since that time those contracts have remained in holdover until this RFP’s completion. Please be advised that current concessionaires who did not propose or were not chosen as part of this RFP have agreed to work together with the successful bidder(s) to prevent any disruption of service to FAT’s passengers. As the RFP process prohibits the Airports Department’s staff from communicating with any proposers prior to any award(s) being made (except for the RFP interview sessions that were conducted by the Committee), it is the Airports Department’s intention to return to Council for the approval of the final concession agreements. Those agreements will include two phases (1) concepts for the existing concession program and (2) concepts for the expansion concession program (which the successful proposer(s) have the right of first refusal to develop the future locations once the terminal expansion is completed). This phased approach will provide the opportunity to share with Council proposed final concepts.
BACKGROUND
This RFP for new concessions was released on October 5, 2022. It was distributed via Planet Bids as handled by the City of Fresno’s Purchasing Division (Purchasing). This RFP was also posted on FAT’s website, in the Business Journal, sent to all local Chambers of Commerce, and published with national airport/aviation pages such as AAAE, ACI-NA; AMAC, SWAAAE, and AXN.
The goal of this RFP was to solicit proposals to provide “top tier” concessions (F&B and N&C) experience to FAT’s passengers, employees, and public who use the facilities for commercial and general aviation flights. The goal also included bringing local restaurants and vendors into the terminal building that represents the Central Valley’s diversity.
Prior to issuing this RFP, the Airports Department presented a workshop to the Council on March 24, 2022, consisting of the vision for the program and the planned outreach process for local concessionaires and vendors. At that time, Council provided feedback and conveyed they wanted the concession programs to represent local restaurants and vendors in the area. The Airports Department took this feedback into consideration and incorporated everything into its outreach approach. With that direction, the Department worked extensively with Unison Consulting to create a Community Outreach Program and an RFP that focused on the products and services offered here in the Central Valley. Six (6) Community Outreach sessions were offered, which consisted of three (3) in-person and three (3) virtual sessions, to help educate the local community regarding the processes and requirements of operating at a commercial airport, such as FAT. The aim of these sessions was to allow for maximum community participation.
The RFP for F&B and N&C concessions was released on October 5, 2022, and was publicly posted on Planet Bids, through the numerous Chambers of Commerce (i.e., Hispanic, Metro, etc.) serving Fresno County, and nationally through American Association of Airport Executives (AAAE), Airport Minority Advisory Council (AMAC), Airport Experience News (AXN), Airports Council International (ACI-NA), and Southwest Chapter of American Association of Airport Executives (SWAAAE). Proposals were originally due on January 3, 2023, but were extended to January 17, 2023, and where they were revealed in a public bid opening. Responsive and responsible proposals were received from three (3) bidders: SSP America, LLC (SSP), for Food & Beverage Concessions only, Hudson Group Retail, LLC, for a combined Food & Beverage and News & Convenience Concessions, and Hudson Group Retail, LLC (Hudson), for News & Convenience Concessions only.
An in-person on-site Pre-Bid meeting was held on November 15, 2022, that included a walkthrough of the terminal building to show the available concessions locations. The following proposals were received by the deadline:
1. SSP America - Food & Beverage Concessions Only
2. Hudson Group - Food & Beverage and News & Convenience Concessions
3. Hudson Group - News & Convenience Concessions Only
Interviews were conducted with all the bidders by the Evaluation Committee. Based on the criteria of this RFP and the bids/proposals submitted, it was determined by the Evaluation Committee that SSP America is the best fit for F&B Concessions at FAT’s terminal, and that Hudson Group is the best fit for N&C Concessions at FAT’s terminal.
A proposed agreement was included as part of this RFP. The Airports Department would like to move forward to award the two separate Agreements, as stated above. The current existing locations within the terminal will be incorporated as presented with some slight changes to their layout and design to allow for best and most efficient use to these spaces. Additional spaces that will later be incorporated into the new proposed concessions program as a part of the terminal expansion project and will be determined by the Airports Department and the two successful bidders.
The City Attorney’s Office has reviewed and approved both proposed Concessions Agreements as to form.
ENVIRONMENTAL FINDINGS
This is not a "project" for the purpose of CEQA pursuant to CEQA Guidelines Section 15378.
LOCAL PREFERENCE
Local preference is not applicable to this Project pursuant to Fresno Municipal Code 4-109(b).
FISCAL IMPACT
The F&B and N&C Concessions Agreements will provide for monthly rental revenue in the form of space rental per square footage, office space and support/storage space in the form of rental per square footage, and 10% of gross revenue at each of the terminal concession locations. All revenue will be deposited into the Airports Enterprise Fund and will contribute to the operation and maintenance of FAT. There is no impact to the General Fund or ratepayers of the City of Fresno from this item.
Attachments:
- Community Outreach Program
- Bid Evaluation and Report from Evaluation Committee (12300507)
- Proposed Concessions Agreements