Oakland Board of Port Commissioners Approves Multi-Year, $120 Million in Contracts with Host International and Andalé Management Group
EDITORS NOTE: See a 60-second multi-media preview of concessions improvements coming to OAK.
The Oakland Board of Port Commissioners yesterday approved two ordinances -- a pivotal point in changing the taste, look and feel of Oakland International Airport's (OAK) food, beverage, retail and duty free concessions. All seven Port board members were in attendance and unanimously approved: (1) an interim and a primary 10-year contract with Host International, Inc. to operate the primary food, beverage, retail and duty free concessions in Terminals 1 and 2, estimated to generate $117 million in revenue for the Port of Oakland; and (2) a 10-year contract with Andalé Management Group, Inc. to operate a 1,500-square-foot sit-down restaurant in the new seven-gate concourse in Terminal 2, which is expected to open in fall 2006, estimated to generate $2.2 million in revenue for the Port.
"Oakland International is known for its low fares, on-time flights and easy access," said Anthony Batarse, the newly appointed president for the Oakland Board of Port Commissioners. "Soon, travelers will also recognize the airport as a transportation hub that offers a variety of quality choices that satisfy their needs for quick food or dining and beverages, and for purchasing gifts, newspapers, books and magazines, ranging from nationally recognized brands to our very own East Bay-based brands."
HOST INTERNATIONAL, INC.
Host International, Inc., based in Bethesda, Maryland, was one of five companies that submitted proposals for OAK's prime concessionaire contract. Host was awarded a contract to operate concessions for: (1) an interim term in the newly-constructed Terminal 2 baggage claim building and seven-gate concourse; and (2) a primary term of 10 years, with no option periods, in most of the Terminals 1 and 2 locations, beginning June 1, 2008.
Local brands and concepts proposed are: Silver Dragon, Max's Eatz, A.G. Ferrarri Foods, Children's Fairyland, Oakland Zoo, Cody's Books, Oakland Tribune, Vella's Locker Room, Everett and Jones, Peony, Otaez, Fentons, Lois the Pie Queen, See's Candies, Koi Palace and Heinhold's First and Last Chance Saloon.
The national and regional brands proposed by Host include: Burger King, Chili's, Subway, CPK ASAP (California Pizza Kitchen), Starbucks, Chevys Express, Pyramid Alehouse, Famous Famiglia, Gordon Biersch, Palm One, Sony Style, Zoom, Tully's, Seattle's Best Coffee, Auntie Anne's and Pizza Hut.
Host's contract covers 15 food and beverage locations (totaling approximately 21,188 square feet) and 16 retail locations (totaling approximately 8,415 square feet), including one duty free shop. Host's proposed concessions will completely transform the look and feel of OAK's passenger terminals.
"Throughout the world, airport passengers have shown a preference for brands that are proven, genuine and successful, resulting in increased patronage and higher sales," said Steve Grossman, director of aviation for the Port of Oakland, which owns and operates OAK. "It is also important to offer local brands as they are a key to creating a unique sense of place and differentiating one airport from another. Oakland and the Bay Area offer a wealth of proven local brands," he added.
Host forecasts that over the almost 12-year interim and primary terms of the contract, it will generate over $900 million in gross receipts, pay the Port over $117 million in percentage rent and employ 350 workers.
"Oakland International is a dynamic and growing airport, and we are genuinely excited about this special opportunity," said Les Cappetta, executive vice president of business development for Host International. "We look forward to bringing the best line-up of local Oakland restaurants and shops to the airport and some of the most popular national brands that travelers desire."
Host currently operates concessions in 75 North American airports, including San Francisco, Los Angeles (LAX), San Diego, Seattle, Las Vegas, Phoenix, Chicago (O'Hare), Atlanta and Miami. Visit HMSHost.com for more information.
OAK's current prime concessionaire, Delaware North Company (formerly known as CA One Services, Inc.), was awarded a contract in 1984 when the airport served 4.1 million annual passengers. The contract was extended in 1995 and expires May 31, 2008. The current contract generates an estimated annual $28 million in gross receipts, $4.65 million in percentage rent paid to the Port and employs approximately 200 people.
ANDALE MANAGEMENT GROUP, INC.
San Francisco-based Andalé Management Group, Inc. was one of three companies that submitted proposals for a casual dining/bar concession at OAK. The Port awarded Andalé a contract to operate Andalé Mexican Restaurant & Bar, to begin upon completion of construction of a 1,500-square-foot permanent restaurant in the Terminal 2 seven-gate concourse. Andalé will first operate from temporary facilities when the new concourse opens in fall 2006.
Andalé Mexican Restaurant & Bar will offer OAK users a menu featuring affordably-priced authentic Mexican food and beverage services. The facility will feature a full-service bar, sit-down service, Andalé-to-Go foods and gourmet coffee. The 10-year contract, with no option periods, is expected to generate $2.2 million in revenue to the Port over the term and employ 25 people.
"We are very excited at the opportunity to build relationships with our friends in Oakland and the East Bay," said Andalé founder Luís J. Sanchez. "Our family-owned way of doing business is a natural fit for the airport and the area," he added.
Andalé, established in 1987, currently operates restaurants in San Francisco, Palo Alto and Los Gatos. In 2000, it opened a concession at San Francisco International Airport (SFO) and has since opened two additional SFO units. Visit AndaleMexican.com for more information.
OAKLAND INTERNATIONAL AIRPORT (OAK)
OAK has over 200 flights a day on 12 domestic and international carriers to 40 nonstop destinations, including Atlanta, Boston, Fort Lauderdale, the Hawaiian Islands including Hilo, New York, Philadelphia, Washington, D.C., and Mexico, and seasonal service to the Azores (Portugal), Vancouver, BC and Sun Valley, Idaho. OAK served 14.4 million passengers and handled over 671,000 metric tons of air cargo in 2005. Visit oaklandairport.com for more information.