- The Washington Times - Friday, July 18, 2003

HMSHost Corp. is calling for a change in the Maryland Aviation Administration’s request for a new retail and food developer at Baltimore-Washington International Airport.

Officials at the Bethesda company, which has operated BWI’s concessions for 30 years, say it will be eliminated from the bidding process if the agency doesn’t broaden its current request for proposal (RFP).

The RFP calls for a retail model that allows a developer to be the leasing agent and attract shops that would be owned and operated by the individual retailers — similar to a shopping mall.

Under the current contract, HMSHost, the “prime” concessionaire, has the rights to develop and operate brand-name retailers at the airport.

“A truly competitive process — one that allows both primes and developers to bid — will serve the best interests of the state,” Steven Izant, vice president of business development for HMSHost, said at a pre-proposal conference yesterday. “By encouraging a fair, open and objective competition among the industry’s leading firms, it will enable the state to determine which business model delivers the most value.”

Developers, retailers and airport employees gathered yesterday for the pre-proposal conference at the BWI Holiday Inn to discuss the details of the agency request, which was issued last month.

As part of its $1.8 billion expansion, BWI is adding more retail and concession space, concentrating it in certain areas and adding more retail beyond the security gates. BWI plans to increase available food space by 62 percent to about 77,000 square feet and retail space by 31 percent to more than 35,000 square feet.

The airport serves 19 million passengers a year and makes about $7 million from retail and food and beverage sales annually. HMSHost raked in $56.1 million in sales last year at BWI, which is a small portion of the company’s overall $1.7 billion annual revenue. The company employs nearly 500 workers at its 60 retail and food-and-beverage locations at BWI.

Industry experts say the airport “developer” model gives travelers more variety and increases revenue for the retailers and the airport. While most airports are using the prime model, more are considering the developer model.

One local company says it won’t be able to do business at BWI if a developer takes over. Phillips Foods relies on the prime concessionaire to manage its brand at airports.

“We don’t know the airport business,” said Mark Sneed, president of Phillips Foods and Seafood Restaurants.

However, the change is exciting for some retailers.

Regional Retail Concepts Inc., which owns Celebrate Maryland, Just Plane Kids and Discover D.C. at BWI, subleases its locations there. The company wants to keep the locally themed shops in the airport’s retail mix and would sublease if a developer comes in.

“We want to be a part of this program,” said Melissa M. Fulton, president of the Columbia company. “We’ve been [at BWI] for eight years. We know how to operate in an airport.”

The RFP states that the current concession employees will receive the first opportunity to fill the new retail jobs. However, representatives from the Hotel Employees and Restaurant Employees International Union Local 7 and airport employees are concerned a developer will attract smaller retailers that would be unable to provide good benefits.

Maryland Aviation Administration officials said the concerns of HMSHost and others would be addressed in an addendum to the RFP, which is scheduled to come out at the end of August. The proposals are due Sept. 23.

Aviation officials will make their decision in October. The decision then would have to be approved by the Board of Public Works in November. The official contract begins in May.

“We hope the RFP is modified,” said HMSHost spokesman David Milobsky. “This airport has a lot of potential and we certainly want to be here.”

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