The Airport's Restaurant/Lounge Concession Agreement with Air Host Billings, Inc. expired, and a Request for Proposals (RFP) was put out for interested parties to operate the existing Restaurant Concession for approximately two years during the construction of the Terminal Concourse Expansion.  This RFP solicited for a concessionaire to continue to operate the existing pre-security dining and the concourse deli operation, basically ending when the newly constructed space is ready to use in 2021.  The Airport will advertise an RFP again, approximately a year from now, for a concessionaire to operate in the newly completed concession facilities constructed during the Terminal Concourse Expansion.
 
This RFP required the successful concessionaire to build a new concourse deli on the B Concourse by October 1, 2019, so that the existing deli can be demolished and construction for the new Concourse Expansion can begin in the old deli area.  The RFP was distributed to ten companies, of which five participated in the Airport's pre-proposal walk through.  The Airport ultimately received four responses.  The four RFP responses were distributed to the selection committee, which was comprised of one City Council member (Brown), one Airport Commissioner (Farmer), the Chair of the Chamber of Commerce Air Service Committee (Van Etta), and three Airport staff (Ploehn, Ketterling, Herold).  After a discussion about each of the proposals, Air Host was selected to continue to operate the Restaurant/Lounge Concession for approximately two years beginning September 1, 2019.  The strengths of their proposal included the financial commitment, the new deli concept, their local pricing concept, and their understanding of the upcoming construction project. Proposals were received from:
 
Concessionaire:                                                      Headquarter Location:
Air Host, Inc.                                                              Memphis, TN
Zootist Hospitality, LLC                                              Billings, MT
Hungry's Restaurant, Inc. DBA Sky Dine                   Sioux Falls, SD
Tailwind MC, LLC                                                       Wilmington, NC
 

City Council may:

• Approve the Restaurant/Lounge Concession Agreement with Air Host Billings, Inc.; or
• Disapprove the Restaurant/Lounge Concession Agreement with Air Host Billings, Inc. and advise staff on how to proceed.

The Air Host proposal offered to pay the City the greater of 12% of Gross Sales or a Minimum Annual Guarantee (MAG) of $225,000.  The next closest MAG was $160,000.  Currently, the City receives approximately $150,000 to $160,000 in annual revenues from this Concession, so the MAG at $225,000 is between $60,000 and $65,000 more annually than the current earnings for the City.
 

Staff recommends that the City Council approve the Agreement with Air Host Billings, Inc. to operate the Airport's Restaurant/Lounge Concession during the construction of the new west concourse and great room areas of the Terminal Concourse Expansion.