"Hopkins chief: Let developer lead effort to boost airport shopping"

Tuesday, April 3, 2007

Hopkins chief: Let developer lead effort to boost airport shopping 
By Susan Vinella
The Cleveland (OH) Plain Dealer


Cleveland's airport director wants to create the feel of a mall at Hopkins
International Airport by adding more stores and inviting more local
businesses to set up shop there. 

Airport chief Ricky Smith said Monday that the best way to do that is to
hire a development company to attract restaurants, clothing stores and gift
shops to Hopkins. The developer would pay for any improvements to the
existing 47 restaurants and stores and for the cost of adding 20,000 square
feet of retail space that Smith wants. 

The city would receive an agreed-upon percentage of revenue from store
owners. 

"You will not find an economic development opportunity larger than this for
some time at the airport," Smith told City Council members at a meeting to
discuss terms of new concession agreements at Hopkins. 

The current 15-year retail concession contract with HMS Host Inc. expires in
August. The food and beverage agreement, also with HMS Host, expires in
2009. The company has run the airport's concessions stores since the early
1980s. Smith will soon invite companies to bid on a 10-year agreement for
both the retail and food-and- beverage concessions. He favors hiring a
developer. If he does, he proposes to accept bids only from companies
operating under the developer model. Smith said he believes this would
create more competition and more opportunity for local businesses. 

He also said it puts the burden of paying for store improvements and
expansion on the developer. 

"We want to rely on the operator to make the investment the airport can't
make," Smith said. 

But his approach would exclude HMS Host, which operates as a management
company that owns all of the stores at Hopkins. The company has exclusive
contracts with national companies that limit the number of independent
businesses that can rent space. 

Host also hires only union workers, and union members complained to council
Monday that they feared losing their health and pension benefits if HMS Host
is replaced. They also said they feared they would make less than their
average wage of $7.50 an hour. 

Smith promised to make sure workers retain their pay and comparable benefits
under a new management company. 

"Trust me," Smith said, turning to the room full of union workers gathered
at the meeting, "I'm going to do everything in my power to make sure you're
better off." 

Council passed legislation Monday night that requires the management company
to retain the 368 concessions workers and give them a comparable benefits
package. 

Smith said passengers spend an average of $5.50 each on food and beverages
and retail purchases at Hopkins. He said he would like to see their spending
double to help lower the costs that airlines pay to the city to help operate
the airport. 

Host paid the airport $3.78 million from concessions sales last year,
according to the company, or about 12.5 percent of $30.3 million in total
sales.

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