Minority business at BWI assessed

Tenant complaints prompt Md. audit of concessions firm

Sun exclusive

May 20, 2007|By Meredith Cohn | Meredith Cohn,sun reporter

State auditors are examining BWI's concessions manager and the minority-owned shops and restaurants participating in a program designed to help them prosper, after mixed results, lawsuits and tenant complaints.

Some minority business owners say the airport and concessions manager BAA Maryland Inc. became so focused on building a large shopping mall inside the Baltimore-Washington International Thurgood Marshall Airport that it hurt their ability to earn a larger share of the millions spent there.

The owner of the Celebrate Maryland gift shop, for example, said her sales fell after a larger rival was allowed to sell similar items. A couple operating a Church's Chicken franchise claim they lost money because BAA dictated their prices and hours. Also, the longtime operator of the smoothie shop Flying Fruit Fantasy said she couldn't afford renovations and higher rent in the new mall.

Those operations are gone from the airport. State reports obtained through the Maryland Public Information Act show that two other businesses have left the airport's Minority Business Enterprise program since 2004 when the state hired BAA to overhaul concessions to include more name brands, local merchants and minority members. Meanwhile, BAA has not met all of the minority goals set by the airport.

"I think the airport was thinking in very lofty terms about what BWI should be," said Melissa Fulton, who opened Celebrate Maryland in 1995 at BWI. She was evicted May 4 for not paying rent and is suing BAA, the airport and the state for $10 million for breach of contract.

"They thought they deserved to have a first-class retail program, and I agree. But I don't believe it should be at the expense of one of the very necessary components of the program, which is the local, small and minority business community that give the airport a real sense of place," Fulton said.

More variety

To be sure, there has been progress, and a BAA official said auditors will see that. Company officials say shopping choices have been widely expanded at the airport, where few name brands or local businesses were found in the past. In addition, officials have more than doubled the number of women- and minority-owned firms since launching the airport program. But while help is available for tenants, BAA said, merchants must succeed on their own.

State Transportation Secretary John D. Porcari, who oversees the airport and all Minority Business Enterprise programs, agrees that variety is greater than ever.

"But we expect [BAA] to make every effort to meet the goals. And if they need to make changes and work harder to meet those goals, then they should be doing that," Porcari said.

The issues at the state-owned airport three years into BAA's contract and questions by The Sun prompted Porcari this month to order audits of BAA's financial performance and tenants' compliance with minority program rules. The recently appointed Porcari and airport chief Timothy L. Campbell would not comment in depth on the program, citing lawsuits and the audits.

Participants in the Minority Business Enterprise program must be women or minority members with limited net worth and relevant experience. Minority members must also control any partnerships. The businesses are eligible for government contracts once the state certifies them.

Airport officials wanted a program so women- and minority-owned businesses would have more opportunities and BWI's concessions would have more of a noncorporate character. But they also knew that consumers have come to expect name brands largely absent in the previous 30 years under HMSHost, which ran most of its own concessions.

BAA promised to mix up the offerings, but the smaller local and minority-owned shops haven't always been able to handle the same debt, rent and competition as the big corporations that have opened there.

Competition blamed

Celebrate Maryland was the most recent business to go. This month, Fulton, 60, sold off her inventory of regionally themed key chains, mugs and Maryland wine and food, and said goodbye to 40 workers at her four stores.

It marred a retail career that she began in 1969 at the Columbia-based Rouse Co., which opened Harborplace and many area malls. Fulton launched her business in her hometown of Ellicott City 20 years ago and moved it to BWI in 1995.

When BAA was hired, she welcomed the company, seeing a chance for the tired concessions to get a fresh infusion of money. Fulton agreed to spend $1.2 million to build new airport stores.

But airport construction forced her to relocate a store several times. BAA and airport officials never turned over space for four of the eight stores she expected to open. Fulton was in debt, her rent was up and sales were down, from $3.3 million in 2003 before BAA took over to $2.7 million last year. She stopped paying rent in December.

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