In August 2014, the Houston Airport System (HAS) issued two Requests for Proposal (RFP) for certain Retail Concession locations at William P. Hobby Airport (HOU). An Evaluation Committee reviewed submitted proposals in accordance with criteria described in the RFP. On, February 19, 2015, HAS presented to the Budget & Fiscal Affairs Committee of City Council its recommendations. The recommendations are as follows:
1. Term
The term will be from the date of countersignature to December 31, 2025.
2. Scope of Service
Concessionaire will develop and operate a Retail Concession program at HOU with well-trained, friendly staff and facilities maintained at the highest standards in multiple locations throughout the Airport.
3. Financial Terms
Concessionaire will pay the City throughout the Term of this Agreement monthly concession fees equal to the greater of a percentage of gross revenues OR a Minimum Annual Guarantee (MAG). No Minimum Annual Guarantee (MAG) shall apply during the first year following the commencement date. Following the first year after the commencement date and for each 12-month period of the Term after, the MAG shall be 85% of the actual compensation due to the City during the preceding 12-month period.
4. Capital Investment
Initially the Concessionaire will expend a minimum of $300.00 per square foot for build-out of the concession facilities. In year five (5) of the Term, the Concessionaire also agrees to expend a minimum of $40.00 per square foot for upgrades, renovations, cosmetic improvements and/or concept changes.
5. ACDBE Goal
The Office of Business Opportunity has established a 30% Airport Concession Disadvantaged Business Enterprise (ACDBE) participation goal for Package 1 and a 32% participation goal for Package 2. Both recommended vendors submitted proposals that exceed the participation goals.
6. Performance Security
Concessionaire will provide a performance security in an amount equal to 50% of the first year’s projected compensation to the City.