Airport Concession Contract Put Out for Bid

In an effort to open Lindbergh Field to more minority- and women-owned businesses, the Board of Port Commissioners on Tuesday voted to put the airport’s lucrative food, beverage, gifts and novelties contract out to bid for the first time in 20 years.

The vote was a defeat for Host International, a subsidiary of Marriott Corp., which has held the airport contract for that time. Host officials said, however, that the company intends to bid on the new contract, which is to begin when the existing contract expires early in 1994.

The outcome was a victory for a coalition of minority groups, called Communities United for Economic Justice, which accused Host of having a dismal record in contracting with minority businesses to operate shops at airports throughout the West.

The San Diego Unified Port District, which operates the airport, has come under criticism for failing to have any minority-owned business at the airport. The only exception was a shoeshine stand run by a black man.

The Federal Aviation Administration, at the behest of minority community groups, found in 1988 that the Port District was sorely lacking in meeting federal requirements and recommended that the port increase the number of businesses owned by women and minorities to 10% of the airport’s gross sales.

Last fiscal year, Host paid the Port District about $2.6 million in rent and, in documents submitted to the Port District, had projected gross sales revenues of about $23.5 million next year based on new businesses and improvements.

In response to the FAA findings, the Board of Port Commissioners last May considered a proposal from Host to increase participation by minorities and women to a level equal to 17.8% of gross sales.

The board asked for more, and last June, Host proposed increasing the level of participation to 28%--estimated at more than $6 million. And, on Tuesday, Host added what it called more “enhancements,” including management training programs, a summer intern training program for minority college students and a college scholarship fund.

Host also said it was raising to $6.5 million the cost of various improvements at the airport to accommodate new fast-food restaurants, some of which were earmarked to be owned and operated by minority members and women.

In return, Host wanted an extension in its lease, the exact length of which was to be negotiated with the Port District, said Gary L. Lindstrom, a Host vice president.

One reason Host has had the contract at the airport for so long is that it has made improvements over the years and had its contract extended by the Board of Port Commissioners for doing so.

But, this time, the coalition pressured to have the contract put out to bid, even though several women and minority members told commissioners they favored Host’s latest proposal and were afraid little would be done to help minorities and women for the next three years.

Commissioner Clifford Graves said that, in essence, the Port District is locked in a “perpetual contract” with Host, and that the agency owes it to the public to put the contract out to bid when it expires. “You have to test what you’re doing against the marketplace every once and a while,” Graves said.

In voting unanimously to seek an open competition, the board also approved setting up its own program to help businesses owned by women and minorities. It also voted to “encourage” Host to negotiate with the Port District to increase the number of minority- and women-owned businesses at Lindbergh during the remaining three years of its contract.