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 Café, 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.”