Contract delays leave empty spots at Atlanta airport

8:49 p.m Friday, Nov. 11, 2016 Business
Kelly Yamanouchi
Empty spots line the Concourse C food court area at Hartsfield-Jackson, due to a longrunning delay in awarding contracts to concessionaires.

The colorfully painted walls along some of the Atlanta airport’s concourses aren’t merely decorative.

They cover concessions spaces that in some cases have been empty for more than a year-and-a-half amid a contracting snarl that’s been drawn out by the firing of the airport’s top executive last spring.

The vacancies mean travelers at the world’s busiest airport sometimes encounter longer lines or waits for tables at other shops and eateries.

The contracting process for new airport restaurants was put on hold after the possibility of a lawsuit arose after the termination of Hartsfield-Jackson International’s former general manager, Miguel Southwell, last May, according to the city’s procurement department.

An attorney for Southwell raised the possibility of legal action in a letter at that time.

“We stopped everything at that point,” Girard Geeter, the city of Atlanta’s deputy chief procurement officer, said during a recent city council committee meeting.

It wasn’t until September that attorneys for Southwell and Atlanta Mayor Kasim Reed said they agreed to drop their dispute.

At this point, the spots on Concourses A and B and the food court on Concourse C aren’t likely to be up and running until next year — after the busy holiday season.

Meanwhile, Hartsfield-Jackson officials are seeking an extension of current contracts for restaurants on Concourse E to allow more time for the contracting process.

Reed’s office, for its part, said the city conducted a review of the concessions process after Southwell’s departure, but “work never stopped.”

After Southwell was abruptly fired in May, a letter from his attorney suggested the dismissal might be tied to his resistence to City Hall influence on contracting decisions.

The letter said airport managers got “direction from senior officials of the City’s Procurement Department to take a number of actions that would impact the award of active procurements of concession and construction contracts … by causing the contracts to be awarded to companies other than the highest-ranked bidder…”

It said such directions came “from the ‘second floor’ or ‘the Mayor.’”

Reed at the time responded with a stinging written statement: “Miguel Southwell is struggling to rescue what remains of his career and this is evident in the fact that he is now making false statements against my Administration and me.”

Still, Reed’s deputy chief of staff, Katrina Taylor Parks, said the city wanted to avoid interfering or tainting the procurement process, “so there was a complete hold on activity. That is the way it was explained to us.”

“There was lot of discussion around this that could have led to some type of legal action, so it was the decision of procurement to hold off… out of an abundance of caution because there were so many questions around this,” Taylor Parks said. “This had to go unfortunately on the back burner.”

Atlanta City Council finance committee chair Alex Wan said he appreciated that “during all this swirling around,” the city put the process on hold. “I think that makes sense.”

The airport asked the city council for approval of a measure waiving competitive contracting requirements to extend current restaurant contracts on Concourse E held by Hojeij Branded Foods, Jackmont Hospitality, Global Concessions and McDonald’s franchise owner Goodrum Enterprises.

Jackmont Hospitality, which operates restaurants including One Flew South on Concourse E, was founded by former Atlanta Mayor Maynard Jackson’s daughter and is led by Daniel Halpern, who was a co-chairman of Reed’s 2009 mayoral campaign. Hojeij’s Wassim Hojeij was a member of host committees for Reed campaign events, and he and relatives made campaign contributions to Reed.

The airport is extending the contracts on a month-to-month basis for up to six months until the contracting process is complete.

“There may be questions about the process,” said Hartsfield-Jackson interim chief financial officer Greg Richardson. But without the extension, “we could run into a risk of not having a contract.” On Monday, the Atlanta City Council approved the extension.

Airport officials said they expect to soon bring recommendations for new hamburger and coffee outlets on Concourse A and B and a new food court on Concourse C to the Atlanta City Council for approval.

Southwest, which operates its flights out of Concourse C, said: “We look forward to having these mid-point concessions open in the near future in order to provide our customers additional food, beverage, and retail options.

The airport first solicited proposals for those spots in January 2015, but canceled that process last year, saying too many of the proposals were “fatally flawed” because they were missing required documents.

The second contracting process launched more than a year ago, with the city receiving proposals for the spots from companies in January 2016. Airport officials said last fall they hoped the new restaurants on Concourses A, B and C would open sometime in mid-2016 — a target that came and went.

Once the city council approves those deals, the leases would be negotiated, then the design process begins, followed by construction — a series of steps that could take months to complete.

The evaluation process was being completed for those concessions, but the city procurement department had not yet begun evaluating proposals submitted in July for new restaurants on Concourse E, according to Geeter.

“I don’t understand what’s so complicated about getting a coffee contract, a hamburger contract, and whatever it is they serve at E,” said city council member Yolanda Adrean. “I’m befuddled.”

Twenty-three firms submitted proposals for at least one of four different contracts for restaurants on Concourse E, including HMSHost, Atlanta Airport Concessions, Paradies Lagardère, SSP America, Marche Hospitality LLC, Hojeij Branded Foods, Tropical Smoothie Cafe and Willy’s Mexican Grill.

A temporary Starbucks will open soon next to La Madeleine in the Atlanta airport’s domestic terminal atrium, as a stop-gap measure after the closure of the terminal’s Starbucks two months ago.

The interim Starbucks will be open before Thanksgiving, according to Hartsfield-Jackson spokesman Reese McCranie.

The old location closed in early September to make way for an expanded queuing area at the main security checkpoint. The airport is redesigning the main checkpoint area as part of its $6 billion airport modernization and expansion.

There are other Starbucks locations past security in the concourses, as well as a Starbucks in the international terminal. But the Starbucks that had been next to the main security checkpoint was the only one in the domestic terminal’s pre-security area.

Both La Madeleine and Starbucks at Hartsfield-Jackson are operated by concessionaire HMSHost.

“We’re still outlining the details of where we will have the permanent Starbucks,” McCranie said. “But in the meantime, while those details are being ironed out, the temporary Starbucks will be there.”

— Kelly Yamanouchi

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