LAX Concession Process Hits Some Turbulence

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I love L.A.! And if you care about the city of Los Angeles, this is a call to action. As president of the California Restaurant Association Los Angeles, the Los Angeles County Education Foundation and the National Association of Women Business Owners – Los Angeles, I have dedicated myself to giving back to the community and finding partners who do the same, which is why I chose HMSHost to be my partner in a business expansion plan into Los Angeles International Airport.

Recently, the city’s Los Angeles World Airports authority received responses to its request for proposals for new concessions at LAX, which like any RFP, had rules, requirements and minimum criteria. But the judges for the RFP seemed to apply different rules to some and no rules to a few. So you’ll understand if those of us who played by the rules have some questions!

Over 35 years, I’ve built my Maria’s Italian Kitchens all over Los Angeles and fed generations of families. I build, invest, employ and pay taxes here. This is my home. I am a 100 percent woman-owned L.A. brand with a proven track record of success, a model that meets high traffic demand, and a menu that promotes value and portability, all things that can make a restaurant successful in the airport.

So I want to know what happened. My questions aren’t because I didn’t win – no one can ever predict or expect that in a competitive process. But I did trust that the LAX bidding process would be, at the very least, fair. With my partner, HMSHost, we not only met the required criteria, we exceeded it by submitting stellar financials; solid sales projections; marketing and operations plans; superb references; and a proposal of brands that included some iconic and local favorites including Nate ’n Al, California Pizza Kitchen, Beso Hollywood, Counter Burger, La Sirena Grill and Cantina, L.A. Food Show, Pinkberry and others.

But, great as our brands are, it’s not even about one brand over the other. It’s also about experience. Most of the restaurants in the winning group have never operated in an airport before. Most restaurants in our group have operated in airports or have an express-service model that would fit well in an airport environment.

Failure rate

The restaurant industry has the highest failure rate, yet companies with experience were rejected in favor of unproven restaurants that were in some cases fabricated?

I am not the only one asking questions. An unprecedented four protests were filed over the outcome of the LAX RFP. Maybe because the winning bids received perfect scores in categories where they didn’t even submit the required information!

One of those companies, SSP, didn’t provide critical financial information and it has been rocked by significant financial problems in the last two years – but it was awarded a perfect score on its financials anyway! Another winning bidder, Areas USA, received perfect scores on references, notwithstanding that two out of its three references were negative!

As if that isn’t bad enough, a conflict of interest between two consultants who helped the airport design and evaluate the RFP is under investigation. Those consultants have substantial financial ties to the two bidders mentioned above, who ended up being recommended for more than 70 percent of the business!

But it seems some people aren’t comfortable with these questions. Some want change for the sake of change. But remember, new cars may be shiny and inviting, but they are no good if there is no engine under the hood. We should be asking more questions, not trying to sweep in change without knowing what we are getting the city into.

The bottom line is that the LAX RFP process gave a big advantage to some bidders at the expense of others. We teach our children to play fairly and by the rules. I am sad to say that in this case, the people who made up the rules didn’t follow it themselves.

Don’t get me wrong, I’m not saying we should have won. I’m simply pointing out that we would have had a good shot at winning if the rules were followed. More importantly, I am saying that these questions are legitimate and deserve answers, no matter who is asking them. I am waiting for someone to stand up and answer these still unanswered questions.

Madelyn Alfano is owner of Maria’s Italian Kitchen, which is headquartered in Van Nuys and has 10 restaurants in Los Angeles.

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