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Item 1.C.
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| City Council Regular | |
| Date: | 12/20/2021 |
| Title: | Agreement with Sky Gifts Billings, LLC to Operate the Airport's Gift Shop Concession |
| Presented by: | Kevin Ploehn, Director of Aviation and Transit |
| Department: | Airport |
| Presentation: | No |
RECOMMENDATION
Staff recommends that the City Council award the five-year Airport Gift Shop Concession Agreement to Sky Gifts Billings, LLC to operate the Airport's new Gift Shop Concession located in the new Terminal Concourse Expansion area.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
Staff advertised for the opportunity for qualified concessionaires to submit proposals to operate the five-year Gift Shop Concession and a Request for Proposals (RFP) packet was sent to all interested parties. The RFP was advertised in the Yellowstone County News on October 8, 15, and 22, 2021 and posted on the City and Airport Websites on October 8 through November 19. This concession oversees the operation of the Airport's gift shop located on the new concourse expansion in the new Great Room area of the Airport Terminal Building. The proposals were evaluated according to a list of items that included revenues to the City, participation as a Disadvantaged Business Enterprise (DBE), experience and qualifications, store concept, build out and transition plan, customer service and operations plan, financial strength, and proposed capital investment to finish the space, decor, and equipment. Proposals were received Friday, November 19, 2021, from the following businesses vying for the opportunity to operate the Airport Gift Shop Concession:
While all proposals would have been able to meet the requirements to operate the gift shop, the proposal from Sky Gifts Billings, LLC was chosen by a selection committee consisting of three Airport staff members (Ploehn, Ketterling, and Herold) and two Aviation and Transit Board Members (Astle, and Tooley), which was formed to review and rank the proposals. Overall, the selection committee felt the concept provided by Sky Gifts did a better job of zeroing in on the Montana experience with its proposed merchandise selection. Additionally, Sky Gifts' revenue guarantee to the City was the strongest. The term of this Agreement will commence on January 1, 2022, for the sole purpose of ordering equipment, planning, and starting construction on the permanent Gift Shop premises. The Concession term of this Agreement will start on March 1, 2022, and terminate on February 28, 2027.
| PROPOSER | HEADQUARTERS |
| Sky Gifts Billings, LLC | Sioux Falls, SD |
| Tailwind MC, LLC | Wilmington, NC |
| Faber, Coe and Gregg of Florida, Inc. | Secaucus, NJ |
| Oakwells CR, Inc. | Winter Park, FL |
While all proposals would have been able to meet the requirements to operate the gift shop, the proposal from Sky Gifts Billings, LLC was chosen by a selection committee consisting of three Airport staff members (Ploehn, Ketterling, and Herold) and two Aviation and Transit Board Members (Astle, and Tooley), which was formed to review and rank the proposals. Overall, the selection committee felt the concept provided by Sky Gifts did a better job of zeroing in on the Montana experience with its proposed merchandise selection. Additionally, Sky Gifts' revenue guarantee to the City was the strongest. The term of this Agreement will commence on January 1, 2022, for the sole purpose of ordering equipment, planning, and starting construction on the permanent Gift Shop premises. The Concession term of this Agreement will start on March 1, 2022, and terminate on February 28, 2027.
ALTERNATIVES
City Council may:
- Approve the five-year Airport Gift Shop Concession Agreement with Sky Gifts Billings, LLC; or
- Not Approve the five-year Airport Gift Shop Concession Agreement with Sky Gifts Billings, LLC and advise staff on how to proceed.
FISCAL EFFECTS
The Gift Shop Concession has historically generated approximately $840,000 to $920,000 in gross revenues from which the Concessionaire remits the percentage that was proposed to the City. This would generally result in revenues for the Airport between $168,000 to $190,000 annually, depending on the total annual gross revenues generated and the percentage of gross revenues offered by the Concessionaire. The Sky Gifts proposal guaranteed $225,000 for the first year, increasing each year to $280,000 by year five.