Concession Program for the New Terminal at Kansas City - - PowerPoint PPT Presentation

Concession Program for the New Terminal at Kansas City International Airport

Bringing the S pirit of Kansas City to the Airport

8/ 3/ 2019

The concession program is being planned and developed j ointly by KCAD and outside consultants



Pat Klein –Airport Director



Dave Long – Deputy Director



Justin Meyer – Deputy Director



Assisted by

 Alan Gluck – ICF

, Airport Concession Management Planner

 Carrie S

tapleton – Phillips-West Communications, President (local outreach)

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Today’s Presentation



Introductions and Welcome



Concession program vision and goals



The Timeline



What are concessions?



Why does the concession program matter?



Certification



How to participate in the concession program



About the big national firms

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KCAD proposes this vision for the airport's concession program

A CONCES S ION PROGRAM THAT IS CUS TOMER-CENTRIC, PROVIDING A S ENS E OF PLACE, WHICH ENGAGES US EFUL TECHNOLOGY AND INTEGRATES A TRUE S PIRIT OF KANS AS CITY .

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KCAD used the vision to develop eight goals for concession program

1.

Opportunities for real local participation through a variety of means

2.

No limits on how local operators participate in the concession program

3.

Competition between concession locations

4.

Prices for concession products must be reasonable

5.

The concession program should be regionally inspired

6.

The highest levels of customer service must be offered

7.

The concession program should make use of cutting edge, useful technology

8.

The concession program should be unique

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Concession Timeline

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

KCAD is starting early to allow consultation with the City Council on important issues, time to carefully consider proposals and time for the vendors to properly plan and execute their visions



Allows time to do things right, without time pressure

Nat ional Out reach (2/ 19) Local Out reach (7/ 19) Nat ional/ Local Meet & Greet (Lat e 2019) S

• licit at ion

Issued (Lat e 2019 – early 2020) S elect ion Process Complet ed (12/ 2020) S t ore development , planning, permit t ing, et c. (2021) S t ore Const ruct ion (2022) Terminal Opening (early 2023)

A couple of notes about today



We are here to talk about the concession program only



The development of the concession program is overseen by the Kansas City Aviation Department (KCAD), a department of the City of Kansas City

 Their primary mission is to provide a convenient, well-functioning terminal building

that facilitates transportation and connects to the National Airways S ystem 

Edgemoor is not involved in this effort

 The M/ WDBE goal does not apply to the concession solicitation



Because of F AA rules, only ACDBE goals apply to this solicitation

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How local firms can be involved in the New Terminal concession program



Operate concessions individually as a tenant or subtenant



Joint venture

 With larger operator  Multiple smaller firms working together



S upplier of merchandise

 “ Made of KC”



S uppliers of food products



S upplier of services



S tore design



S tore construction

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More about this later!

Food S ervice Concessions

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Retail Concessions

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S ervices Concessions

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We all know the building will be beautiful But it is the concessions that make the airport truly “ Kansas City” The concession program will make an important statement by representing the best of the City and the region in brand, product and design National brands will be encouraged to make their locations unique through design and use of locally produced merchandise and ingredients, as well as local partners and operators

Why is the concession program important?

Airport Concession Disadvantaged Business Enterprise (ACDBE) Program



The ACDBE program

 Federally-mandated program  Create opportunities for business owners who have historically been under-

represented in airport concession programs 

Goals are set by each airport

 Based on the number of operators who are “ ready, willing, and able” to operate an

airport concession

 ACDBE goal for this proj ect is 16%



Local M/ W/ DBE certification does not apply to concession operations, nor does it automatically qualify you as an ACDBE

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Requirements to be certified as an ACDBE



Firm is 51%

• r more owned and controlled by one or more members of one of

the ethnic or other groups described in 49CFR S ubpart D §26.67(a) which are presumed (rebuttably) to be socially or economically disadvantaged

 S

• meone is not a member of one of those groups, but who can prove they are

socially or economically disadvantaged can also qualify as an ACDBE 

Firm owners are U.S . citizens or lawfully admitted permanent residents



Firm does not exceed $52.47 million average annual gross receipts over the preceding three years (some exceptions apply)



Personal net worth of less than $1.32 million

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Airport Concession Disadvantaged Business Enterprise (ACDBE) Certification



Need to be certified in your home state

 For Missouri, kcmo.gov/ humanrelat ions/ mwdbe-slbe-affirmat ive-act ion/

 Application available online or from us

 For Kansas, kansascommerce.gov and search for “ ACDBE”

 Applications available online or from us

 For all other states, please search online for “ ACDBE” and your city or state or

airport name

 If you are not in Kansas or Missouri and cannot find your state’s information, contact Alan

Gluck (alan.gluck@ icf .com) for assistance

 There is no cost to apply for ACDBE certification  Links to all Kansas and Missouri forms can be found on the

flykci.com/concessions website

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Operating at an airport has both upsides and downsides



Advantages of operating in an airport

 Market generally has above average income  Travelers often have time on their hands

 S

hopping and dining are entertainment  A proven market that wants to shop/ dine



However, there are certainly some disadvantages

 Operations up to 18 hours per day, 7 days per week, 365 days per year  S

ecurity requirements

 Construction of concession units at other airports tend to run between $700 -

$1,000 per square foot or more

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Operating a concession as a sub-lessee with a larger national firm



One (or more) large concession firm(s) will be involved in the concession program in one way or another

 KCAD has not yet determined how the concession program will be managed



There may be opportunities to team with these firms to operate a concession location



Each vendor will have to negotiate its own deal with the larger firm



This would give an operator the chance to manage his/ her own business within the airport, with the support of the firm with which it has a contract

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Joint ventures are a way to pool resources while still having a say in the business



The most common form of j oint venture is when a local firm partners with a national firm



Generally, the national firm is the maj ority partner, although that is subj ect to your negotiations



Agreement must specifically set out the rights and responsibilities of each j oint venturer



Each j oint venturer must contribute the same percentage of capital as it has ownership share



Each j oint venturer must complete its separate and distinct statement of work with its own employees for it to count as a j oint venture



Each j oint venturer must have the same level of control over the organization as it has

• wnership share



Joint venture agreements will be strongly scrutinized if they are submitted to ensure that they follow the Federal Joint Venture guidance



If you don’ t really want to be involved in the day-to-day operation, consider licensing your concept

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Joint ventures are a way to pool resources while still having a say in the business



A second form of j oint venture would be an association of multiple smaller firms put together for the purpose of obtaining an airport contract

 For example, a local developer could team with multiple local food service and retail

• perators and a local source of capital in a j oint venture to be overseen by the

developer with management participation by the other members

 Would allow multiple firms to participate, bringing the best of many local operators  A very good way to bring sense of place and a true taste of Kansas City to the program  May combine multiple local and national brands  Agreement will have to lay out governance  S

trongly urge any companies interested in this to contact a lawyer

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S

• , I don’ t operate a store or restaurant

– how do I participate?



S uppliers are an important way of being part of the KCI concession program

 S

uppliers of goods, supplies and merchandise are very important and can be certified as ACDBE’s

 These materials are very important to the airport in establishing the “ sense of

place”

 We will encourage all airport concessionaires to use products grown, processed and

produced within the Kansas City region

 We intend that this program will be “ MADE OF KANS

AS CITY”

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There are many opportunities for participation in design and construction



Design opportunities exist for every concession location at the airport

 KCAD expects that its concessions will be unique and exciting and will tell visitors

that they’ re in Kansas City

 Besides the products, the design can be a strong deliverer of the Kansas City

message 

Each location must then produce a complete set of construction drawings

 Often these drawings will need to be revised after review by the airport’s

permitting/ design review committee 

There will also be substantial opportunities for firms involved in all of the construction trades, from GC to electricians and plumbers



While these are not ACDBE opportunities, they are important to KCAD and the City

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So… who are the big airport concession companies that you may hear from?

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Before I introduce the firms, however…



We know that national firms have already started doing outreach in the local

• community. We encourage this but they are here to promote themselves, their

business and their vision of what is best



These firms have substantial experience in airports



KCAD strongly urges you to have your attorney or advisor closely review any agreement that may be tendered



We will maintain lists of local firms who attend these meetings and will make them available to national firms upon request and will also appear on our website



Contacts for the national concession-focused firms may be found on our website as well



The order in which companies appear on the following pages has no significance

• ther than alphabetical order



Please note that there may be other large companies who are considering competing for this program. This list is not all-inclusive and as we become aware

• f other companies, we will add them to the list on our website

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Airport concession developer/ managers which have expressed interest in the New Terminal

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More information



We intend on having a “ meet and greet” to introduce national and local firms in Winter 2019



No KCAD employee or consultant can or will get involved in any meetings or negotiations between local and national firms

 The only exception is that we will sponsor one or two meet and greet session(s)

close to the time that KCAD issues a competitive solicitation later this year 

If you have any general questions you might have about airports or the KCAD program, please email alan.gluck@ icf.com



KCAD will be providing Councilpersons and local trade and business

• rganizations with updates as there is new information



Useful information will be posted to the KCAD Concession website, www.flykci.com/ concessions

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ANY QUES TIONS ?

If you prefer, we have cards at the front desk. Please write out your question, put your email address on the card, and we will respond Please also don’t forget to take a handout with you

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Concession Program for the New Terminal at Kansas City International Airport

Please visit our website: ht t ps:/ / www.flykci.com/ concessions