- The Washington Times - Wednesday, March 10, 2004

Maryland’s Board of Public Works yesterday approved a new contract between the Baltimore-Washington International Airport and BAA USA, which manages the mall at Pittsburgh International Airport.

Under the agreement, BAA Maryland, a subsidiary of BAA USA, will develop and manage nearly 141,000 square feet of food, retail and service space at the airport. The new contract ousts Bethesda-based HMS-Host Corp. as the retail operator after 30 years at BWI.

“This is a very exciting time at BWI,” said Paul J. Wiedefeld, executive director of the Maryland Aviation Administration. “I am particularly pleased that our new concessions program will offer a strong combination of local and regional products, along with established national brands.”

An interim contract is effective immediately and a 10-year contract will begin when the airport’s new terminal complex is completed in 2005. HMSHost’s contract ends April 30.

Yesterday’s decision comes after a lengthy battle over the fairness of the MAA’s request for proposal for a new retail operator.

The administration wanted a retail model that allowed 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.

HMSHost argued that the airport would receive less rent revenue under this model because the developer would be taking a cut.

Companies like HMSHost that followed the “prime” concessionaire model, which develops and operates the retailers, were eliminated from the bidding process.

“We’re extremely disappointed,” said David Milobsky, a spokesman for HMSHost. “We are in shock that our company has been excluded from a fair opportunity to propose.”

HMSHost runs 60 retail and food-and-beverage operations at BWI.

BWI serves 19 million passengers a year and is undergoing a $1.8 billion expansion. The airport makes about $7 million from retail and food and beverage sales a year.

BAA projects revenue will reach $131 million over 12 years — about $11 million a year. The company says BWI’s revenue per passenger will increase from $5.50 to at least $7.36 during the next few years.

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