Approved by 2-1 vote as BWI's new concessionaire

BAA USA

Mall-style shopping coming to airport

HMSHost departing

March 11, 2004|By Meredith Cohn | Meredith Cohn,SUN STAFF

Maryland's newest proposed shopping mall has its own runway.

A state panel gave final approval yesterday for Baltimore-Washington International Airport to bring brand-name shops and restaurants to the airport with a new concession operator. Passengers could begin noticing changes at the airport within a few months.

After several weeks of debate on the issue, the Board of Public Works voted 2-1 to have BAA USA Inc., the subsidiary of a British firm, take over from HMSHost Corp. of Bethesda, the 30-year incumbent concessionaire at the airport. BAA owns airports and runs concessions in several airports in England as well as in Pittsburgh, Boston and Indianapolis.

The board's members - Gov. Robert L. Ehrlich Jr., Treasurer Nancy K. Kopp and Comptroller William Donald Schaefer - debated whether enough companies had the chance to bid, whether the airport would make money and whether current workers and minority firms would have opportunities under the new contract.

Airport officials moved to make the change because BWI has ranked low in revenue and customer satisfaction for its concessions even as it became one of the nation's fastest growing airports in recent years.

Airports around the country are taking a new look at their concession fare to offset the increased cost of additional security and because travelers are arriving earlier to pass checkpoints and are spending more idle time in terminals.

A vote had been postponed from two weeks ago to give panel members more time to evaluate the 12-year contract. The delay also gave Del. Peter Franchot, a Montgomery Democrat who chairs a panel that oversees airport contracts, time to hold a hearing to assess why the state received only two bids and why Bethesda-based Host did not believe it could submit a proposal.

Ultimately, Kopp was the lone board member to vote against the contract. She said she was not persuaded that airport officials had secured the best deal possible because a narrowly drawn request for proposals excluded companies that might have bid.

The contract is expected to bring the airport an average of $11 million a year after the airport expands its concession space to about 120,000 square feet from about 60,000 square feet. The current contract brings in about $7 million a year.

"I'm disappointed," Kopp said. "This is such a long-term contract and so much money. But this is not the end of the world. They know we'll be watching."

Kopp requested that the airport make progress reports.

She got an assurance from Paul J. Wiedefeld, executive director of the Maryland Aviation Administration, which runs the state-owned airport. He said airport officials had spent time studying other airports and the market to determine which kind of concessionaire would bring the best choices for passengers and the most money for the state.

"We want to hit the ground running," he said. "We have a lot to do. They take over in May and it will take months to physically renovate the airport and build out spaces for new stores. We think this will be great for the airport and for our customers."

Paul Weber, international retail director for the British parent company BAA PLC, said the company has been in talks with several national chains and local businesspeople to move into the airport. It has no signed leases yet because the company did not officially have the contract until yesterday.

A Web site was also set up so workers can apply online for new jobs, www.baa-bwi.com. They will be given priority with the new shops and restaurants, Weber said.

Under the existing setup, Host employs all 500 workers. Many of them have expressed concern that they will be unable to keep their jobs or benefits.

The deciding factor in the Board of Public Works decision appeared to be testimony from a Montgomery County lawyer, R. Robert Linowes. An airport commissioner who served on the panel that studied the models, Linowes is well-known by board members, partly as the architect of a state tax study in the 1990s.

BAA would bring in better stores for passengers and more money to the airport than would the Host model, he said. Host operates a so-called "prime model" in which all employees work for Host and brand names are brought in under licensing agreements only. BAA's developer model is run like a shopping mall where space is leased to individual companies.

Schaefer, who cast the deciding vote, said he wanted to defer to Linowes' and airport officials' judgment.

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