San José awards retail and food and beverage tenders

Nicole Mezzasalma

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HMSHost captures two of the four concession packages available at San José International airport

San José International airport has awarded four retail and food and beverage concession packages following a request for proposals (RFP) issued at the end of 2007. Travel retailer HMSHost was awarded two of the four packages despite having achieved the best scores for all four as the RFP stipulated that no bidder could be awarded more than one retail and one food and beverage contract. AMS-SJC JV, a joint venture between the airport and airport retailer Hudson Group, was given the remaining retail contract, while Areas USA won the remaining F&B package. Each grouping contains locations in both terminals at the airport, which received 13 proposals from six companies by the submittal deadline. The airport is currently undertaking a $1.3bn renovation of the terminal facilities, scheduled for completion in mid-2010, which will grow the retail area from 23,000sq ft (2,136sq m) to 43,000sq ft (3,995sq m).

HMSHost was awarded packages one and three, having offered a minimum annual guarantee payment of $1.62m and $2.86m respectively. Package one originally comprised a retail area of 8,202sq ft (762sq m), but due to the airport’s terminal improvement plan three of the existing temporary units in terminals A, A+ and C will close in 2009 and 2010, reducing the final space to 6,052sq ft (562sq m). Package four contains 10,016sq ft (930sq m) of food and beverage concession space and about 5,600sq ft (520sq m) of food court seating and circulation area.

Package two, awarded to AMS-SJC JV, includes 8,425sq ft (782sq m) of retail space. Again, because of the airport’s terminal improvement plan, three of the existing interim units in terminals A and C will close in 2009 and 2010, reducing the ultimate package to 6,775sq ft (629sq m). Finally, Areas USA won package three, which contains 11,575sq ft (1,075sq m) of food and beverage concession space and 1,375sq ft (127sq m) of food court seating and circulation area.

The original RFP included an option for one company to win a consolidated package including the four packages described above and act as a master concessionaire at the airport. However, the only proposal sent for that option, by Westfield Concessions Management, had a lower overall evaluation score than the individual package proposals.

The San José City Council approved the airport’s recommendations on June 10, awarding the retail and F&B concessions to the HMSHost, Areas USA SJC and AMS-SJC JV. The airport will now negotiate and execute 12-year concession agreements between the city and the selected companies, effective from the day of execution through June 30 2020. According to the airport’s recommendation to the council, the objective is “to have the new concessions programme in place when the new terminal facilities open in 2009 and 2010”. If an agreement of terms cannot be reached by August 1 with the winning bidders, the airport has the authority to negotiate a new concession agreement with the next-ranked proposer for that package.

The list of retail concepts proposed by HMSHost for Package 1 includes a Techshowcase electronics store, a Brookstone outlet and local confectionery company Schurra’s Fine Confections. Among the stores proposed by AMS-SJC JV are  a Sunglass Hut shop, a Discover San José souvenirs outlet and an Ed Hardy fashion and accessories concept.

The statement also said that the four packages will give the airport a guaranteed minimum annual revenue of $8.2m and an estimated annual sales tax of $564,000 to the city’s General Fund beginning once the new concessions programme is fully operational. Click here for more information on the tender.