Contract for Food at LAX Is Extended

The Los Angeles City Council voted Friday to approve a controversial 2 1/2-year contract extension for Los Angeles International Airport’s major food and beverage provider, with lawmakers saying the company had moved decisively to resolve complaints about poor working conditions for employees.

The council voted 10 to 1 to extend the city’s agreement with HMS Host Corp., despite earlier concerns by some officials that a single city commissioner negotiated the deal, and complaints from union groups that employees were being underpaid and denied breaks.

Councilman Nate Holden cast the lone vote against the contract. He said the city had not bothered to confirm Host’s assertions that it lost money because of the remodeling of two terminals. Holden called the validity of the deal into question, saying the city’s chief administrative officer forwarded the issue to the council without any recommendation.

“We don’t have accountability for their loss of funds,” Holden said. “You’re cutting a deal that’s already been cut. It’s not clean. It’s dirty.”

The Times reported in February that Airport Commission President Ted Stein had bypassed normal channels by personally negotiating the contract extension with HMS Host, a significant campaign contributor to Mayor James K. Hahn. The mayor appoints commission members.

The full Airport Commission approved the contract, although Stein’s exclusive handling of negotiations caused a rift with some of his colleagues, who said they felt shut out of the deal.

City Controller Laura Chick asked for a review of the contract.

Although the city attorney’s office advised that it is appropriate for a single commissioner to negotiate with a contractor, that opinion did not entirely settle the matter.

At this week’s meeting of the airport panel, commission Vice President Warren Valdry asked for another opinion--on whether it is appropriate for a commissioner to direct city staff without the full commission’s authorization.

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Company Says It Lost $4.5 Million

The new deal means the firm’s contract to operate many of the airport’s restaurants will continue until at least June 2008. HMS Host manages California Pizza Kitchen, Pizza Hut, Burger King and Starbucks outlets there, among others.

Host contends that the contract extension was fair because the company lost $4.5 million when it was unable to open several concessions in Terminal No. 7 and Terminal No. 4 while the facilities were being remodeled by United Airlines and American Airlines, respectively.

In his report, William T. Fujioka, the city’s administrative officer, said these financial losses “have not been verified/audited by the [airport] department.”

Host agreed not to ask for compensation for the losses if its contract was extended.

The deal ran into another hurdle last week, when union members complained to the City Council’s Commerce, Energy and Natural Resources Committee about their treatment by the concessionaire. The workers said they were underpaid and denied breaks by HMS Host.

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Employees Tell Council of Progress

When workers returned Friday to address the same council committee, they said they had begun to resolve their grievances with the company.

“I’m here today to tell you that HMS Host made an effort to work out these problems,” said Ernesto Lara, a cook for Chili’s restaurant in Terminal No. 4. “They’ve promised to pay me money for unpaid wages and breaks.”

The committee unanimously recommended the extension, sending it on to the full council for the final vote.