Losing LAX Concessionaires Serve Up Sour Grapes

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Like Madelyn Alfano who wrote an op-ed in the Sept. 6 issue (“LAX Concession Process Hits Some Turbulence”), I also love L.A. I’m a third-generation native of Los Angeles, so I’ve seen this city go through many changes. And as the owner of L.A.-based Groundwork Coffee Co., I am especially proud to have the opportunity to participate in bringing authentic L.A.-style food and drink to our airport.

But let there be no doubt, despite my own enthusiasm and that of Alfano, who owns Maria’s Italian Kitchen, the contract for new concessionaires at Los Angeles International Airport is about money.

Alfano is in a group headed by HMSHost, which has operated and controlled the food concessions at LAX for more than 40 years. Its annual profit from those operations exceeds $24 million. Yet LAX constantly ranks at or near the bottom of every survey of food and amenities at major airports in this country. Despite bringing in millions in profit each month, HMSHost has created what is unanimously considered a bland, generic dining experience, smack dab in the middle of the most vibrant and culturally diverse food city in the country.

Unfortunately, despite this long history of poor performance, HMSHost and its partners know they only have to force a redo of the request-for-proposal process and they will remain as the operators at the airport for at least two more years. That’s $48 million more in profit.

Alfano states that the process wasn’t fair and HMSHost was treated differently. Yet, more than five months after the competition results, HMSHost has not been able to show a single instance where it was unfairly treated. Indeed, the City Attorney’s Office recently published its ruling regarding HMSHost’s protest. It ran more than 60 pages in length and concluded unambiguously that each and every one of HMSHost’s protests was without merit.

What Alfano and the people at HMSHost fail to mention is that they did not come in a close second in the bidding process. If they had, then the interpretation of the scoring would have earned a second look. The reality is that HMSHost came in dead last among four or five companies in every competition block.

After attacking the process without success, HMSHost and its allies have ventured the argument that operating in an airport environment is difficult and should be reserved for companies with experience. Alfano speaks of the high failure rate in the retail food industry. Their argument is akin to saying, “Our products and service may not be very good, but since we’re the only ones who’ve done it, we should stay at LAX.” This brings up the question, if nobody new is allowed to operate at LAX, how is any company supposed to gain the necessary experience?

In business for years

I can’t speak for all the other companies in my group, SSP, but most have been in business for more than 20 years, and that includes Groundwork, Border Grill, Park’s BBQ, Nick and Stef’s, Bertha’s Soul Food and La Serenata de Garibaldi. Each of these companies has managed to stay in business for more than two decades and make pretty good names for themselves along the way.

Another line of attack chosen by HMSHost has been to say there was a conflict of interest with our group. Carmen Trutanich, the city attorney, has opined that both HMSHost and SSP had sufficient involvement with parties involved in the selection process to provide legal challenges if the issue were to come before a judge. However, Trutanich also left the decision on how to move forward with the City Council, specifically the five-member Board of Referred Powers.

Trutanich and two members of that board, Tony Cardenas and Janice Hahn, were recently reported by the Los Angeles Times to have significant financial and personal ties to HMSHost and its lobbying firm, Ek and Ek. At this point, the entire process has become a convoluted mess of lobbying money, insider politics and back-room deals, and needs to be dragged out into the sunshine for all to witness.

Finally, Alfano points out that Maria’s Italian Kitchen, as well as others in her bid group, are great reflections of L.A.’s food culture. Yet, this is true for all the companies that participated in the RFP, and is also true for hundreds of other locally owned and operated establishments that have the standing but did not get an opportunity to bid. The fact remains that a competition was held. The process was long and laborious. Each group knew the parameters and rules of the competition and, at the end of the day, there were winners and losers.

Now, more than five months later, with HMSHost and its allies on the City Council and in the City Attorney’s Office delaying the process and threatening to overturn the results, the only losers are travelers through LAX and this city’s ability to accomplish anything meaningful in the future.

Richard Karno is the owner of Groundwork Coffee Co., an L.A.-based organic coffee roastry that has five locations in the cities of Los Angeles and Santa Monica.

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