Tuesday, March 13, 2012

Long Beach Airport Food Venders Announced For New Terminal

A team of local venders led by Atlanta-based concessionaire, The Paradies Shops, was awarded a contract to provide gifts, news, retail, food and beverages at the Long Beach Airport’s new passenger concourse once completed next year.

The Long Beach City Council, on March 6, unanimously approved the new concession agreement with Paradies-Long Beach, LLC, in anticipation of a new boarding lounge to be built and opened by May 2013.

Teaming up with local merchants, the national concessionaire is making a capital investment of $4.3 million into the new concession facilities and has committed to bring in $2.7 million in revenue to the airport the first year of opening, with a minimum guarantee of $850,000 to the airport’s enterprise fund. Currently, the airport receives about $1.5 million in annual revenue from concessions, according to airport staff.

Paradies, which operates more than 500 retail concessions at over 70 airports and hotels in the United States and Canada, has been the Long Beach Airport’s concessionaire since 2005.
For the new concessions, the company proposes a rental agreement with the airport of 15 to 22 percent of gross revenue from food and beverages, 16 to 20 percent of gross revenue from gifts, news and retail and 21 to 22 percent of gross revenue from specialty beverage and food. The concessionaire also proposes .48 percent of gross revenues to be paid toward a mid-term refurbishment fund.

For food and beverage services, Paradies chose local restaurants and eateries Polly’s Gourmet Coffee, Sweet Jill’s Bakery, George’s Greek CafĂ©, Taco Beach Cantina and McKenna’s on the Bay. Gifts, news and retail partners include Long Beach Clothing Company, the Long Beach Business Journal and CNBC News. The specialty beverage and food operator will be 4th Street Vine, a small wine and beer bar in the Retro Row business district.

“This is a fabulous company, they are the leaders in the industry and the concept that you’ve taken, using local businesses, is just another complement to our airport to make us that much different and that much more unique,” Long Beach Councilmember Rae Gabelich told Airport Director Mario Rodriguez during the council meeting.

The concession contract was finalized after airport management had conducted outreach since February of last year, holding a series of meetings with local restaurateurs and small businesses, while screening interested bidders before sending out a request for proposals. The concession goals are to “upgrade product offerings, enhance revenue to the airport fund, encourage investment to facilities and maximize the customer experience,” according to airport staff.

The airport received a total of eight proposals by the deadline last November 18. After presentations, an evaluation panel of top management from the airport, the Long Beach Convention and Visitors Bureau and the city selected Paradies’ proposal as the “best match with the goals and customer experience the airport desires.”

Aside from providing concessions at the new concourse, The Paradies Shops will continue to operate as the concessionaire at the historic terminal building gift shop. The airport’s other landside and pre-security concessionaire, SSP America, will also continue to operate food and beverage facilities at the terminal building. Both of these existing contracts are to expire in October 2015.

“Paradies is a first-class operation and we’re proud to be part of the local team involved with the new airport facilities,” said Business Journal Publisher George Economides. “With upwards of three million passengers seeing our name, it’s certainly going to be great exposure for the Business Journal, but more importantly, it provides us an opportunity to promote to visitors the positive attributes of Long Beach and to encourage more people to do business here.”

(Sean Belk - Long Beach Business Journal Staff Writer)

Thursday, March 1, 2012

LB Airport To Launch Study Of Reconfiguring Daugherty Field

The Long Beach Airport (LGB) is launching an extensive, $1.1 million, two-year airfield geometry study in March to start analyzing the safety, operational and financial benefits of reconfiguring the 1940s-era Daugherty Field and airport property, in conjunction with forming a “strategic plan.”

The study is expected to provide a comprehensive evaluation of the airfield geometry and alternatives to reduce risk on the airfield in response to a report by the Commercial Aviation Safety Team (CAST), a federally organized group comprised of government and aviation industry experts.

The CAST report, published in 2007, contained a review of “wrong runway landing event” threats at various airports across the country. As a result of the report, the Federal Aviation Administration (FAA) put out a “Call to Action” for 20 airports, including Long Beach Airport, with a high probability of an event, to take action to reduce risks. Actions include enhanced markings, recurrent pilot training and holding a runway safety meeting, according to Rachel Korkos, the airport’s senior civil engineer.

The airport, which is currently constructing a new airline passenger concourse and terminal, currently sits on 1,166 acres of land, has five runways and 10 taxiways. Airport operations include daily flights of commercial airlines and commuter aircraft, along with 300,000 general aviation operations, or GA, including corporate aviation charter jets, fixed based operators, or FBOs, small private airplanes, helicopters and flight schools.

The upcoming airfield geometry study continues discussions about reducing safety risks at the airport, Korkos said. “The geometry study will analyze the complex nature and taxiway system at LGB and make recommendations with an eye toward safety and reduction of risk,” she said.

One alternative brought forward is to shorten or close two north-south runways, known as Runways 16L-34R and 16R-34L, which airport staff said are “unlighted, in need of repair and extensive maintenance and are rarely used.” Among other alternatives are converting runways to taxiways, removing portions of runways or taxiways, installing runway guard lights and modifying pavement markings.

Although final recommendations won’t be determined until the end of the two-year study, airport staff said it is likely that airfield modifications will be recommended, which may open up some areas for development. Potential uses of the property would be analyzed by a strategic plan with a main focus on diversifying revenue streams for the airport, while keeping costs low for users, tenants and leaseholders.

“It is very important to keep the airport financially viable with a plan for the future,” said Airport Director Mario Rodriguez. “Should areas open for development, they will be analyzed for potential users to ensure the continued financial health and viability of the airport.”

The strategic plan would look at a wide range of resources regarding surrounding partners and infrastructure, along with comparisons to other airports in the region, analyzing aviation industry trends, and various other factors.

Rodriguez said keeping costs low is not only important to stay competitive in maintaining a base of commercial airlines, which generates the bulk of profits, but also for keeping costs low for the airport’s general aviation community. One of the goals to modifying the airfield, he said, is to create a “new home for general aviation.”

Airport fees impact all users, including airfield maintenance operators, which, in turn, ultimately impacts costs for the entire GA community, Rodriguez said. LGB has an economic impact that exceeds $4 billion a year, he said. “Controlling costs and finding new revenue is essential to keep the user fees competitive,” he said. “If we are able to maintain the capabilities of the airfield while reducing costs, it creates a win-win for our users.”

After initial data collection and analysis, the airport is expected to conduct necessary coordination with the FAA, stakeholders, airport user groups, tenants and the public during various meetings. Additionally, any proposal to close runways or implement airfield modifications would have to be approved by the FAA and be required to undergo an environmental impact report.

Missouri-based HNTB Corporation was awarded two separate contracts, totaling more than $1.1 million, to assist the airport in conducting the geometry study and strategic plan. The Long Beach City Council awarded the contract last December, and the city attorney’s office is currently finalizing it. The consulting company previously provided design and construction support services for the airport’s modernization program, including the air carrier ramp upgrades and the new passenger concourse and terminal project.

Funding for the study came from FAA grants received for airport capital improvements. The FAA is paying 95 percent of the cost, while the rest will be funded by airport operating funds, which the airport is hoping to cover by applying for passenger facility charges. The study and plan is expected to support 12 full-time equivalent positions.

(Sean Belf - LB Business Journal)