"Daley ally's O'Hare concession contracts go out to bid this year"

Tuesday, May 16, 2006

Daley ally's O'Hare concession contracts go out to bid this year 
BY FRAN SPIELMAN
The Chicago (IL) Sun-Times


A pair of O'Hare Airport concessions contracts benefiting one of Mayor
Daley's closest friends in politics will be put out to bid later this year
-- for the first time in more than a decade -- to ease a concessions
backlog, officials said Monday.

In declaring plans for a wide-open competition for duty-free shops,
hamburgers and quick-serve food, City Hall acknowledged that too many
airport merchants are operating on expired contracts.

"We definitely recognize that there have been delays. But we are very
excited to be moving full speed ahead with fresh concepts in 2006," said
Aviation Department spokeswoman Wendy Abrams.

"In total, the Department of Aviation intends to issue at least seven major
concessions RFP's [requests for proposals] in this year alone." 

The Chicago Sun-Times reported last week that five new O'Hare concessions
contracts -- the first to be awarded in nearly two years -- will be
introduced to the City Council amid word that 60 percent of airport
merchants, including a pair of mayoral allies, are operating on expired
contracts.

O'Hare Duty Free Partners, which operates duty-free shops at O'Hare's
domestic terminals, is partially owned by former state Sen. Jeremiah Joyce,
a Daley political operative who is one of the mayor's closest friends in
politics.

Joyce is also a part owner and paid consultant for another expired
concessionaire: Chicago Aviation Partners. The partnership between Duty Free
International and McDonalds operates fast-food, news/gift and specialty gift
shops at O'Hare's International Terminal. 

Yet another expired agreement benefits former Illinois Gaming Board chairman
Elzie Higginbottom, Daley's leading fund-raiser in the black community. He's
a part owner of the Grove, a mixed-nut and dried fruit concession. The RFP
for snack, popcorn, chocolate and candy shops is already on the street.

Net worth ceiling blamed

The longer the expired deals are allowed to drag on without competition, the
more it stands to benefit political heavyweights. But Abrams said clout is
not the reason why 16 of the 27 concession agreements have expired and six
others have been extended beyond their initial termination dates. 

Instead, Abrams blamed a federally mandated $750,000 net worth ceiling for
disadvantaged business enterprises and a new economic disclosure statement
drafted by City Hall. 

"The ability of owners with the financial strength, stability, business
experience and capital required to enter into a major airport concessions
agreement totaling less than $750,000 are limited. This personal net worth
limit significantly restricts the pool of prospective business owners
available to us and many other airports nationwide," she said. 

Also contributing to the concessions backlog was the city's own economic
disclosure statement, Abrams said. It required RFP respondents who submitted
statements before the change to "resubmit" their forms, she said. 

The decision to advertise for hamburger and quick-serve food concessions
could break the McDonalds' stranglehold over O'Hare fast-food concessions.

As Abrams put it, "When we issue a major concessions RFP, we view that as an
openly competitive process." 

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