A private selection committee has recommended a Canadian firm to run food, drink and retail operations at the new Kansas City International Airport terminal.
City officials on Thursday identified Vantage Airport Group of Vancouver as the winning bidder for the lucrative deal to run concessions at the city’s new $1.5 billion terminal. Under a proposed agreement with the firm, Vantage would pay the city a minimum of $1.75 for every passenger who boards a flight at the airport. With 2019 passenger traffic patterns, that would have assured the airport more than $10 million.
Vantage will invest $65 million to develop new stores, restaurants and bars. Officials with the company said 80% of the businesses in the airport would be locally inspired. Local partners mentioned on Thursday included Bo Lings Chinese Restaurant, City Market Coffee Roasters, Brown & Loe Parisi Coffee, Martin City Brewing and the Negro Leagues Baseball Museum.
The company plans to highlight well known parts of Kansas City, including Union Station, 18th and Vine, City Market, Brookside and the Stockyards District.
The concessions bid is one of the largest opportunities available to private companies at Kansas City International Airport, the city’s largest ever infrastructure project.
The contract process came under scrutiny for transparency issues as city leaders weighed bids in private. City officials said the public was kept out to protect the integrity of the process. But the secrecy allowed jockeying among council members, communication from prospective bidders and lobbying from a key labor union to occur outside of public view.
There were at least five groups bidding on the contract. Experts have said it represents an unusual opportunity in the aviation industry: the chance to run an entire food, beverage and retail operation at a new terminal.
On Thursday, city leaders identified the five bids they received:
▪ Delaware North Companies, Inc.
▪ Greater Kansas City Restaurant & Retail Group, LLC
▪ MERA KC
▪ PLTR-SSP @ KCI, LLC
▪ Vantage Airport Group US, ltd
A few dozen people filed into the Council Chambers well before the 2 p.m. meeting was set to begin. By 2 p.m., about 50 people were chatting while they waited for the announcement.
Mayor Quinton Lucas posted on Twitter that the council planned to ask questions before deciding to accept, change or deny the proposal.
As we continue the legally-prescribed, objective selection process, this afternoon Council, the public, and mayor learn of the winning bidder and details of their bid. We then ask additional questions before we decide whether to accept, modify, or reject the proposal. @KCStar https://t.co/oR77bNbauM
— Mayor Q (@QuintonLucasKC) September 16, 2021
Before Vantage was publicly identified as the winner, Unite Here Local 72, a labor union representing current KCI concession workers, lobbied against that company. The union said it opposed Vantage because the firm did not support retention of existing workers.
“We are concerned that the transition of concessions employers at the airport could result in the loss of employment for these workers,” said a letter from Unite Here vice president Kim Bartholomew to Kansas City Council members. “This kind of disruption could result in workers losing their jobs, but also could result in turmoil in airport concessions staffing at a time when food service employers are already finding it difficult to maintain adequate staffing levels.”
On Thursday, Vantage officials said they had begun discussions with the local union. Officials said airport workers would earn at least $15 per hour.
“Employees there today will have the first opportunity to work in the new terminal,” said Rob van Snik, senior director of commercial development at Vantage.
Vantage plans to charge a 15% premium above “street” prices for food, beverages and other items. That means a burger that goes for $10 at North Kansas City’s Tay’s Burger Shack will go for $11.50 at the airport. Some high-volume items like bottled water will not face premium charges.
While Vantage operates in 31 airports, it has a presence at only two in the U.S.: Chicago Midway International Airport and Terminal B in New York’s LaGuardia Airport.
Kansas City leaders described the proposal as “hyper local” because of its inclusion of many local partners. The company plans to organize concession areas by neighborhood. One area inspired by City Market, for example, will include a market-like canopy with venues underneath.
Notably, the presentation didn’t include any of Kansas City’s well-known barbecue restaurants. But it did mention a partnership with the American Royal that will allow locals to compete for the right to sell barbecue at the airport.
While many restaurants and local shops vied for the rare opportunity, few will ultimately win a spot at the new terminal.
“I think it will be a great opportunity to participate as a Kansas City business. It’s great exposure for our brand,” said Bo Lings owner Richard Ng. “People see us and hopefully will try our restaurants when they are in town. We hope it’s all upside.”
He said Vantage gave him options to operate the Chinese concept himself, to partner with them or to let them be the operators but he hasn’t decided which model to pursue yet.
“They said they are experienced airport operators and they could give us a small percentage,” Ng said.
The concessions contract must be approved by the city council before the developer can begin working inside the half-completed terminal.
Council member Kevin O’Neill expressed concern about a contractor who would be tapped to manage construction for Vantage because of what he characterized as poor relationships with labor unions.
Council members Heather Hall and Teresa Loar raised concerns about the lack of Northland representation in Vantage’s proposal.
Hall noted that no concepts North of the river were included save for Tay’s Burger Shack, which sits outside the city limits in North Kansas City.
“This airport is north of the river. There’s nothing about north of the river here. I mean we live up there, the four of us do,” Loar said in reference to the council’s four Northland members. “There was no mention of living north or what we represent or anything else.”
Loar also raised concern about the developer model Vantage proposed. The other four bidders proposed a master concessionaire model, in which the operator runs the entire operation by licensing brand names from local and national companies. Vantage has proposed subleases with multiple tenants running their own stores.
“The person who buys their coffee at the airport doesn’t care what management model is behind the scenes … they want good customer service, they want great, quality food,” said Kansas City aviation director Patrick Klein.
The selection committee was made up of five members: Klein; Councilman Dan Fowler, District 2; Wes Minder, assistant city manager; Nia Richardson, of the city’s KC BizCare Office; and airline representative Kyle O’Neal, of Southwest Airlines.
The city council took no action on the proposal Thursday but will consider it during a committee meeting next week.
But because of the city’s closed review process, the public may not know much about the other four bids until a contract is signed. Council member Melissa Robinson, of the 3rd district, asked whether the council could have some summary information regarding the other four bids.
But Klein said he wanted to keep information private until the process is complete.
“It allows the city to be in a bad negotiation position if we have to negotiate with a second place or third place offer,” he said.
After questions from several council members, city officials said they would allow council members to view the proposals, but withhold them from public view.
“I think that’s a privilege and a right of this council,” Loar said. “I think the council needs to have a look at them.”
The Star’s Joyce Smith contributed to this story.