Kansas City awarding massive airport contract for restaurants, bars and shops in secret
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The team at Joe’s Kansas City Bar-B-Que thought it had a solid shot at serving barbecue at Kansas City’s new $1.5 billion airport terminal.
The award-winning barbecue company signed on to a bid with HMSHost, which runs food and beverage operations at more than 120 airports around the globe, including in Kansas City. Also on the bid are some of the area’s best-known names, including J. Rieger & Co. distillery; Rye, the elevated Midwestern restaurant concept run by Colby and Megan Garrelts; and Andre’s Confiserie Suisse, makers of Swiss chocolates and pastries. The pitch even included involvement from the Kansas City Royals and Sporting Kansas City.
But that group has been cut from the running, said Ryan Barrows, vice president of operations at Joe’s KC. A special committee has selected a favored vendor to win the lucrative contract to run restaurants, bars and retail stores at the new terminal. And it wasn’t the one submitted by HMS Host.
Barrows said he and other members of the team have been left in the dark as the city contemplates various bids in private. City officials confirmed to The Star that they had selected a winner, but declined to release any details about the bids they received.
“The general sentiment from multiple bidders on this deal is that there’s a bit of a lack of transparency,” Barrows said.
The concessionaire bid is one of the largest opportunities available to private companies in the transformation at Kansas City International Airport, the city’s largest ever infrastructure project. The winning firm will make monthly payments to Kansas City for the right to sell food, drinks, retail products and services to a captive travel audience.
At least five groups bid on the contract, which experts say represents an unusual opportunity in the aviation industry: the chance to run an entire food, beverage and retail operation at an entirely new terminal.
While many agreed the city needed a newer, modern airport, the process to build one was mired in controversy from the start, as city leaders in 2017 negotiated in private to award a no-bid contract to Burns & McDonnell to construct the new terminal.
Kansas City Mayor Quinton Lucas, a councilman at the time, was among those who expressed misgivings about the propriety of city officials discussing a deal for the new terminal in private.
The arrangement with Burns & McDonnell gave way under public pressure to an open bidding process. Edgemoor Infrastructure & Real Estate eventually was selected to develop the new terminal.
Last week, Lucas declined to comment as similar concerns were being raised with another big contract being awarded outside of the public view.
But Barrows, for his part, had this to say: “This is just my take on business practices: when I’ve made mistakes in the past, I certainly don’t like to repeat them. And the fact that there’s already been controversy around the airport project, I would have been open and transparent. And I think the residents of Kansas City deserve that. And I don’t feel like that’s what happened.”
Kansas City leaders say they have kept the bidding private to protect the integrity of the process. City officials declined a request under the Missouri Sunshine Law to provide copies of all the bids received. At first, leaders said the law required that those bids be kept secret. State law does allow public agencies to close bids, but as the Missouri Court of Appeals has ruled, they are under no obligation to do so. In fact, the Sunshine Law urges governments to err in favor of transparency, not secrecy.
Kansas City leaders later said they routinely elect to keep bids private on all projects. Spokesman Chris Hernandez said all airport concessionaire proposals would be released to the public only after a winner has been selected, terms have been negotiated and a final contract has been signed.
“This process ensures a fair and competitive process,” Hernandez told The Star. “It allows city staff to objectively evaluate competing proposals without outside interference.”
But that hasn’t stopped behind-the-scenes jockeying among council members and prospective bidders and involvement from a key labor union. The city’s secrecy, though, has allowed much of that to occur outside the public’s view.
Concerns over transparency
Chuck Hatfield, a Stinson attorney, sent a letter to the Kansas City Aviation Department on Aug. 25 urging “transparency and a fair award” of the concession contract.
Hatfield’s letter said he’s representing one of the bidders. Reached on Friday, he said he was not authorized to disclose which one and could not comment further on the situation.
Hatfield’s letter to assistant aviation director Pete Fullerton requested documents that would show who bid on the contract, how the bids were evaluated and the existence of any conflicts of interest by city employees or officials.
Hatfield’s letter also referenced an Aug. 11 email that indicated the city was negotiating a contract with one of the bidders.
“To the extent that the City is moving toward a contract award, we urge the city to conduct any negotiations....in a fair and transparent manner. Negotiations should be conducted with all offerors, preferably using the Best and Final Offer process available in Section 25” of the city’s code.
In government contracting, a best and final offer lets a selection committee request that bidders submit a final bid after initial bids are received, often with an eye toward choosing the vendor offering the best service at the lowest price.
Dan Fowler, a member of the Kansas City Council representing the 2nd District, is among those on the concession selection committee.
Reached by phone last week, Fowler declined to identify the recommended bidder, citing confidentiality.
However, a letter from Unite Here Local 72, a labor union representing current KCI concession workers for HMSHost, identified Canada’s Vantage Airport Group as the recommended bidder.
Unite Here protested Vantage Group’s recommendation because its bid did not support the retention of 100 existing KCI concession workers.
“We are concerned that the transition of concessions employers at the airport could result in the loss of employment for these workers,” said the letter from Unite Here vice president Kim Bartholomew. “This kind of disruption could result in workers losing their jobs, but also could result in turmoil in airport concessions staffing at a time when food service employers are already finding it difficult to maintain adequate staffing levels.”
The letter identified Delaware North, along with HMSHost, as other bidders. In an interview, Bartholomew said those companies both signed pacts agreeing to retain the local union workforce. No such assurances were given by the other bidders, she said.
A Vantage spokesperson told The Star that the firm had good working relationships with organized labor throughout the country and has employee retention plans for all airports where it operates.
Bartholomew said she was shocked by the secrecy surrounding the process. The union regularly reviews airport vendor bids, but was denied a records request from Kansas City. She said she had involved the international union to no avail.
“Everybody’s just as stumped as we are as to why we can’t get information on the process, who put in bids and who the forerunners were,” she said.
Council member Eric Bunch, who represents the 4th district, said there is logic to the city’s closed bid process: By keeping proposals close to the vest, the city ensures companies don’t steal ideas or see competitive information. Keeping bids sealed until the process is concluded can also protect the city from liability and help ensure taxpayers get the best and lowest price, he said.
“But I think there’s the question about should there be some level of transparency because I’m now voting on a contract with a concessionaire for the airport and I’m voting on it based on someone else’s word and I just sort of have to trust the process,” he said.
Bunch said he wouldn’t characterize the general bidding process as “secretive.” But he acknowledges it may not be ideal, especially with such a large contract like the airport concessionaire. Rather than voting on multiple options, the council will be presented with an up-or-down vote on the single vendor chosen by the selection committee.
“It seems like there’s some case for keeping things this way,” he said, “but I would say that it kind of keeps those of us who weren’t in the room in the dark a little bit.”
The other bidders
While it appears that Vantage Airport Group, together with OHM Concession Group of St. Louis, are the front runners in the bid process, nothing has been finalized yet.
Vantage spokeswoman Kate Donegani acknowledged the company’s bid, but declined to comment on particulars.
“We understand that there is great interest in the project,” Donegani said, “but as you can expect we must respect the RFP process and communications protocol, which prevents us from sharing any further details.”
Elliott Threatt, a local comedian and businessman, said he was working with Paradies Lagardere on its bid for KCI concessions. That Atlanta-based company declined to comment on its bid.
Threatt said he hasn’t heard whether the firm was getting consideration for the concession contract.
“We have the rights for the Kansas City Chiefs (with our bid) and you think that would carry some weight in the city,” Threatt said.
Blue Stone Management is another company vying for the contract. It partnered with Mera, a Mexican-based operator, and California’s Metropolitan Culinary Services.
“We haven’t heard anything from Kansas City airport yet,” said Javier Malespin, managing partner at Blue Stone.
He wouldn’t disclose local brands that joined the bid, but said his company didn’t ask restaurants to sign exclusivity agreements, meaning they could participate in multiple bids.
“Our whole model is all based on the community,” Malespin said. “But I’m sure everyone’s is.”
HMSHost did not respond to a request for comment.
Neither did OHM, the St. Louis group who sources say is favored for the contract in a joint bid with Vantage.
Delaware North, based in Buffalo, New York, worked on its proposal for months ahead of submitting it in June. In an interview this spring, executives said Kansas City’s bid was unique among American airports. While smaller airports may rely on one contractor, larger airports generally have multiple vendors who operate food, beverage and retail services.
“This is a rare opportunity that we don’t often see, where you have a brand new terminal being built and they’re looking for one master concessionaire for the whole program,” said Jamie Obletz, a president at the company.
To prepare, Delaware North officials said they had immersed themselves in Kansas City’s food scene. They envisioned the airport holding as many as 20 distinct restaurant concepts, a mix of grab-and-go options, sit-down restaurants and bars. Obletz said the company met with more than 100 potential partners to ensure it could bring local flavor to the airport.
And in Kansas City, that means barbecue.
“It’s hard to pick just one because there’s so many good ones,” said Obletz. “So we’ve put everything on the table.”
Kansas City barbecue
There’s no question that barbecue will play a central role in the new terminal. The city’s request for proposals actually highlighted brands like Joe’s and included technical information about possible locations for meat smokers.
Yet some of the area’s best-known brands actually had no interest in the opportunity.
“I do it the old fashioned way — with a pit and wood. I didn’t think it would fit there,” said Ollie Gates, owner and CEO of Gates Bar-B-Q. “And I like to control my own destiny.”
Under the city’s master concessionaire bidding process, the winning bidder could choose to operate and staff each business at the airport. The city will allow bidders to operate restaurants themselves, subcontract operations or enter joint ventures.
But some local barbecue legends were worried that agreements could leave them with little control at the airport. Through a licensing agreement, for instance, a local restaurant could have its name and menu items on display at KCI but have little involvement in the day-to-day operations.
“My guess is it’s not worth it. I would be open to doing it, but I just think they want to use my name and do it,” said Jerry Rauschelbach, owner of Arthur Bryant’s Barbecue. “I said you’re going to have to do it our way if you want to do it.”
He said airport vendors initially called him about participating in a bid, but he was adamant that he would be hands-on with how the meat was prepared.
“When I got into particulars, all of a sudden the phone calls stopped. Because what they want to do is to use your name to get people in the door and they don’t give a crap about your product,” he said. “Arthur Bryant’s is really known for big sandwiches at great value. And that is really tough to do in that concept.”
Similarly, officials with Q39 and Fiorella’s Jack Stack Barbecue said those well-known brands did not participate in a bid. Slap’s BBQ was approached about the opportunity, but the award-winning Strawberry Hill joint thought it would require too much of an investment and didn’t want to give up control of its food.
Terry Hyer, chief operating officer at Zarda Bar-B-Q, said the company had joined the bid from Mera and Blue Stone. He said Zarda plans to remain hands-on if it is selected as the airport’s barbecue purveyor.
Even if Zarda isn’t selected, Hyer said he was confident the airport would highlight at least one of Kansas City’s multiple premiere barbecue brands.
“We’re just quietly waiting and letting the process unfold, but clearly we’re excited, to be honest, win, lose or draw on this,” Hyer said. “Yeah, we want to be out there. But the bottom line is we know that Kansas City barbecue needs to be out there.”
Other Kansas City brands are also waiting to hear if they’ll be selected.
Boulevard Brewing Co was approached by several vendors. In a statement, the beer giant said it didn’t sign any exclusivity agreements and was involved in multiple bids.
Made in KC Marketplace, which sells products made by 250 Kansas City area businesses, participated in three bids.
Chris Goode, owner and founder of Ruby Jean’s Juicery, is waiting to hear whether his healthy eating concept will win a spot at the new terminal. Goode named the juicery after his grandmother and said it would be a huge opportunity for his brand to greet travelers at the airport.
“I’m just hopeful and standing by. We hope for the best,” he said. “It will be a great opportunity. I hope to see my grandma’s face up there someday.”
Yet as some wait to hear, others say they’ve already been told no.
René Bollier, owner and president of Andre’s Confiserie Suisse, said the company planned a retail shop that would also sell food items like quiche, chicken vol-au-vent and ham-and-cheese croissant for diners.
But as part of the HMSHost bid, Bollier said Andre’s has been notified their vendor hasn’t won the contract.
“We were super excited to be included in what I feel are some of the most exciting, innovative groups in Kansas City,” he said. “They wanted a local flavor, they wanted something that really spoke of the Kansas City food scene.”
While Andre’s is holding out hope for a positive outcome, Bollier said he wants to know more about who won.
“I was under the impression that there was going to be more transparency,” he said. “I hope that transparency comes about — who was picked and why they were picked and why that group is better than our group.”
This story was originally published August 30, 2021 at 5:00 AM.
