The Airport Gift Shop Concession Agreement is due to expire August 31, 2010. This concession oversees the operation of the Airport's gift shop located on the concourse level in the center of the Airport Terminal Building. Staff and the Concessionaire have discussed the Agreement term expiration as it relates to seasonal purchasing needs.  Because the bid process for the Gift Shop Concession holds a degree of uncertainty for the existing Concessionaire, it is difficult for the current Concessionaire to place enough orders for the balance of the tourist season and for the upcoming autumn hunting and fishing seasons, due to lead times on the merchandise and the desire to not have a lot of additional stock on hand should the concession bid be lost.  The autumn purchasing events are followed up by the holiday season, which requires ordering different stock.  When discussing what time frame of the year would be the best to do a bid for this concession, both for the current Concessionaire and also for any potential new concessionaire, it was determined that the end of the year would be the best time to end the concession agreement since the months of January through March tend to be the slowest retail months at the Airport and do not require a significant amount of stock to be ordered for those months.  In order to facilitate both autumn and holiday purchasing, the Concessionaire desires to extend the term of the Agreement. Staff has reviewed the request and determined that a four-month extension to the term and setting a new expiration date of December 31, 2010 would be beneficial to both parties.  Amendment 1 to the Agreement amends the term for the additional four months. As in the past, prior to expiration of the Agreement, staff will advertise for the opportunity for qualified concessionaires to submit proposals to operate the five-year Gift Shop Concession and prepare a Request for Proposal (RFP) packet for all interested parties.

The Council may:

• Approve Amendment 1 extending the term of the Agreement; or
• Not approve Amendment 1 extending the term of the Agreement.

The Gift Shop Concession generates approximately $620,000 to $650,000 in gross revenues from which the Concessionaire remits the percentage that was proposed to the City. This will generally result in revenues for the Airport ranging between $115,000 and $120,000 annually, depending on the total annual gross revenues generated. Based on the results of the past fiscal year, the additional four months will result in approximately $35,530 in additional revenues to the Airport.

Staff recommends that Council approve Amendment 1 to the Airport Gift Shop Concession Agreement, extending the term to December 31, 2010.