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Agenda Item
ASR
Control 19-001259 |
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MEETING DATE: |
01/14/20 |
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legal entity taking action: |
Board of Supervisors |
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board of supervisors
district(s): |
2 |
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SUBMITTING
Agency/Department: |
John Wayne Airport
(Approved) |
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Department contact
person(s): |
Barry A. Rondinella (949) 252-5183 |
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Dave Pfeiffer (949) 252-5291 |
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Subject: Authorize Request for
Qualifications and Request for Proposals for Concessions
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ceo CONCUR |
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Clerk of the Board |
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Concur |
No Legal Objection |
Discussion |
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3 Votes Board Majority |
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Budgeted: N/A |
Current Year Cost:
N/A |
Annual Cost:
N/A |
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Staffing Impact: |
No |
# of Positions:
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Sole Source:
N/A |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: 08/27/2019
#20, 03/26/2019 #29 |
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RECOMMENDED ACTION(S):
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1. |
Find that the subject activity is not a project within the meaning of the California Environmental Quality Act (CEQA) Guidelines Section 15378 and is therefore not subject to review under CEQA. |
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2. |
Authorize the Airport Director or designee to issue a Request for Qualifications for the Airport Concession Development Program Phase 2. |
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Authorize the Airport Director or designee to issue a Request for Proposal to qualified respondents for the Airport Concession Development Program Phase 2. |
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Authorize the Airport Director or designee to empanel a qualified group of experts to score the responsive proposals and return to the Board of Supervisors with recommendations for the award of the concession leases. |
SUMMARY:
Authorizing the Airport Director or designee to release a Request for Qualifications, issue the Request for Proposal to qualified respondents and to empanel a qualified group of experts to review the responsive proposals will assist John Wayne Airport staff in bringing a recommendation to the Board of Supervisors for the award of the concession leases.
BACKGROUND INFORMATION:
John Wayne Airport (JWA) operates within a confined footprint and has a cap on passenger traffic of 10.8 million annual passengers (MAP) through December 31, 2020. The 2014 Amendment to the 1985 Settlement Agreement provides for an increase to 11.8 MAP through December 31, 2025, and 12.2 to 12.5 MAP through December 31, 2030, contingent upon levels of service. The confined footprint and the passenger cap limits the growth potential of JWA and commercial revenue business.
Currently, JWA has food and beverage concession agreements with Vino Volo and Subway, which expired in July and November 2019 respectively and are operating on a month-to-month holdover; Host International, which expires in 2021 and Carl’s Jr. and McDonald’s whose lease terms expire in 2022. JWA has news/gift and specialty retail concession agreements with XpressSpa, whose lease term expired in 2018 and is presently operating on a month-to-month holdover and Paradies and Hudson Group, whose lease terms expire in 2021 and 2022, respectively. JWA staff have identified several potential new concession sites in addition to the current food and beverage and specialty retail concession offerings.
The 2017 and 2019 Phoenix Marketing International surveys were conducted at JWA and identified a decrease in passenger guest satisfaction with the current quality of food and beverage and retail offerings. The 2017 passenger research study identified a 15 percent decrease in passenger guest satisfaction on the quality of food and beverage selection and a 14 percent decrease in quality of news, gift and other retail services, compared to 2015. The 2019 passenger research study identified an additional 5 percent decrease in the quality of food and beverage services and an additional 10 percent decrease in quality of news, gift and other retail services, compared to 2017. In addition to the decreased passenger guest satisfaction with concession offerings, the survey also highlights the guests’ desire for increased options for food and beverage and coffee, as well as specialty retail options.
Currently, JWA concession space operates near capacity, specifically during peak hours when queuing is common in food and beverage operations and multiple outlets do not have sufficient seating to meet guest demand. As a result, the unavailability of concession seating capacity has contributed to a decline in guest experience and a loss of potential sales. This lack of capacity will be exacerbated by the authorized MAP increases in 2021 and 2026.
To close the gap in passenger satisfaction and to provide a superior guest experience, JWA plans to develop optimal concession spaces. JWA proposed a comprehensive four-phase Concession Development Program that will encourage local concepts and brands in its quick-serve and casual dining categories. On March 26, 2019, the Board of Supervisors (Board) authorized the Airport Director or designee to issue a Request for Qualifications (RFQ)/Request for Proposals (RFP) for Phase 1 of the Concession Development Program, which was issued on March 27, 2019. Phase 2 is planned to be issued in January 2020 and Phase 3 and Phase 4 in the summer of 2020.
Phase 1 consisted of a total of two specialty retail locations, two casual dining & bar locations, four specialty coffee locations and one quick-serve location throughout Terminals A, B and C. Selection was made through the RFP process and awarded by the Board on August 27, 2019. Construction of the newly awarded leases is expected to be completed by the third quarter of 2020.
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Phase 1 (Completion third quarter 2020)
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Phase 2 (Completion first quarter 2021)
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Phase 3 (Completion in 2021 and 2022)
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Phase 4 (Completion in 2022 and 2023)
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JWA staff retained the services of airport planning and consulting firm Unison Consulting, LLC (Unison) to assist with the evaluation of the current commercial concessions program goals and the approach developed by JWA staff, including a refreshed focus on local and regional concepts. Unison reviewed the concession program proposed by JWA and concluded that the elements of the Phase 1 and 2 Concessions Development Program are viable and have validated the strategy, approach and detail of new concession locations within the pending RFP. Unison is currently working on the master merchandising development program for Phase 3, taking into account Concession Development Programs Phases 1 and 2. This will allow for balancing of concessions and better utilization of space in the Terminals.
Public Outreach/Information Meeting
Over the past 30 months, JWA staff conducted numerous outreach meetings with the local Orange County business community to inform them about the Concessions Development Program and the upcoming opportunities at JWA. These outreach meetings consisted of onsite tours of JWA and participants included a diverse range of potential vendors from national, regional and local brands. These vendors may respond to the RFQ/RFP process for Phases 2, 3 and 4 (successful awardees for Phases 1 and 2 can also propose in Phases 3 and 4) described, dependent upon their particular business type. Additionally, JWA will conduct two public information meetings on January 15, 2020, to better educate the Orange County business community about operating in an airport environment. These meetings will include presentations from key JWA staff and regulatory agencies such as the Transportation Security Administration, the Orange County Sheriff’s Department, the California Alcohol & Beverage Control, the County Inspectors and the Orange County Health Department that regulates JWA.
Issuance of Request for Qualifications
JWA seeks Board authorization for the Airport Director or designee to issue an RFQ to receive Statements of Qualifications (SOQs) from qualified entities who want to be considered for the upcoming Concession Development Program. Respondents must state for which of the two concession categories (food and beverage and/or specialty retail) they want to be considered. As set forth in the RFQ, respondents will be required to meet all of the minimum qualifications. The RFQ for Phase 2 will be posted to BidSync and SOQs will be required to be submitted by January 28, 2020.
The RFQ will require respondents to be able to demonstrate experience, identify ownership, key personnel in their organization and revenues. A review of the qualifications will determine if the respondent entity passed or failed, based upon the minimum qualifications by concept listed in the RFQ. Respondents that pass are qualified to participate in the following RFP process and will move on to the next phase of the selection process. JWA staff will provide a list of qualified respondents to the Board.
Request for Proposals
Phase 2 of the Concession Development Program consists of seven leases for nine locations, two casual dining bars, one wine bar, one quick-serve and five specialty retail locations (three locations in one lease). The RFP will provide for direct leasing with local and regional businesses to operate concessions that will enhance the guest experience. The RFP will be posted on BidSync and Proposals will be required to be submitted by March 12, 2020.
The purpose and goals for this RFP are as follows:
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Emphasis on local and regional concepts; |
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Provide a superior guest experience; |
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Refresh the concession program with a focus on local and regional concepts; |
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Provide new specialty retail and food and beverage options that reflect the evolving tastes and preferences of the JWA traveler, as shown in the 2017 and 2019 Phoenix Marketing International Survey; |
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Improve breakfast and grab-and-go offerings in all food and beverage locations; |
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Attract quality and diverse tenants who promote excellence in guest services and provide a positive, equitable and inclusive working environment for their employees; |
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Attract concessionaires that provide employees with continuous training opportunities, advancement, benefits and worker retention program; and |
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Promote sustainability through design and operational improvements. |
JWA seeks Board authorization for the Airport Director or designee to issue the RFP to qualified respondents and empanel a group of outside subject matter experts to review the responsive proposals. Based on the evaluations and scoring by the RFP panel of subject matter experts, JWA will return to the Board with recommendations for the award of seven concession leases.
Compliance with CEQA: This action is not a project within the meaning of CEQA Guidelines Section 15378 and is therefore not subject to CEQA, since it does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment. The approval of this agenda item does not commit the County to a definite course of action in regard to a project since it furthers an administrative process to secure bids for future projects and does not authorize or commit the County to award any bids received for such future projects. This proposed activity is, therefore, not subject to CEQA. Any future action connected to this approval that constitutes a project will be reviewed for compliance with CEQA.
FINANCIAL IMPACT:
N/A
STAFFING IMPACT:
N/A
ATTACHMENT(S):
Attachment A – Request for Qualifications
Attachment B – Request for Proposal/Concession Leases
Attachment C – Phase 2 Concession Development Program
Attachment D – Phase 2 Concession Development Program Schedule
Attachment E – Unison Concession Development Program Phase 2 RFP Report