LAX concession bids prompt new conflict charges

The culinary combat involving the selection of new dining spots inside Los Angeles International Airport has taken another turn: a complaint to the city attorney alleging that two more companies vying for contracts have conflicts of interest.

The charges leveled by Host International Inc. prompted the Board of Referred Powers, which features five of the Los Angeles City Council’s 15 members, to postpone a hearing set for Thursday to review the bidding process and the finalists selected by airport officials for retail, food and beverage contracts.

The council panel is set up to make decisions when city boards or commissions are deemed to have a conflict of interest. In the case of the LAX concessions, the president of the Board of Airport Commissioners was found to have a potential conflict involving one of the prospective restaurant concessions.


A representative of the board chairman, Councilman Tony Cardenas, said Wednesday that the meeting was delayed so City Atty. Carmen Trutanich could review the new conflict-of-interest allegations.

Host, which was not recommended for one of the LAX contracts, contends that Los Angeles World Airports had two consulting firms — the SmartDesign Group and Jacobs Consultancy Inc. — working on the LAX bidding process even though they had financial ties to two recommended bidders.

Host, a longtime airport contractor, spelled out the details of its legal complaint at a “tasting” event Wednesday to highlight some of the restaurants that are part of its LAX application. Those companies include Johnny Rockets, La Brea Bakery and Pinkberry.

Bethesda, Md.-based Host claimed that one of the finalists, SSP America Inc., had hired SmartDesign for at least five airport projects in London, Australia and the United States. Work on three of the projects coincided with the bidding process at LAX, the complaint states.

Meanwhile, Host alleges that Jacobs Consultancy is linked to Jacobs Carter Burgess, which has partnered with concession bidder Areas USA for a Florida turnpike project. Both Jacobs Consultancy and Jacobs Carter Burgess are owned by Jacobs Engineering Group.

Host’s lawyer, Jerold Neuman, said that state conflict-of-interest law requires that the bidding process be scrapped even if there is no evidence of “malfeasance.”

An airport spokesman said the agency would await a legal finding by the city attorney.

“While we’re disappointed with another delay, we’ll wait until the city attorney’s office renders its opinion,” said Mike Molina, deputy executive director of external affairs for Los Angeles World Airports.

Officials for Areas USA flatly denied Host’s allegations, saying in a prepared statement that Areas USA has no contractual relationship with Jacobs Engineering or any of its subsidiaries, including Jacobs Consultancy and Jacobs Carter Burgess.

“Any allegation to the contrary is patently false,” they stated.

Pat Murray, a senior vice president for SSP America, called Host’s action “a disingenuous, if not deceitful attempt” to play on the council’s and the public’s lack of knowledge about airport consultants.

Murray said every company competing for LAX concessions contracts has either hired or now employs SmartDesign, including Host, which, he added, has had a 20-year relationship with the company that specializes in designing airport facilities. Host denied that it employed the firm during the bid process.

He also said that SmartDesign had no part in developing the LAX bid process for food and beverage services, nor did it help evaluate and select the finalists for contracts.