Title
Request to Issue Revenue Contract Solicitation for Common-Use Airport Lounge
Description
Request to authorize the City Manager, or his designee, to issue a Revenue Contract Solicitation (RCS) for one or more common use airport lounges. Each respondent must propose a minimum annual guarantee (MAG), which shall be greater than $350,000.
Report
Summary
The Aviation Department (Aviation) is seeking a vendor to develop, operate, and manage a common use airport lounge in Terminal 4 at Phoenix Sky Harbor International Airport. The RCS will be issued to ensure a fair and competitive process. The goals of the Common Use Airport Lounge RCS are to optimize sales and revenue over the term of the lease, improve the quality and uniqueness of the lounge facility, emphasizing local culture and Arizona destinations in the design of the facility and in food and beverage offerings, and to select a respondent with experience operating successful common use airport lounges in the United States or abroad.
The total lease space in Terminal 4 is 5,346 square feet. Upon mutual agreement between the parties, an additional location in Terminal 3 may be added to the lease to develop, operate, and manage a common use airport lounge.
The successful respondent will be required to create and operate a lounge that:
- Offers access to customers flying on any airline, regardless of class of ticket, for a fee.
- Offers access to customers belonging to partner organizations, such as airlines, credit card companies, etc., with complimentary lounge membership benefits.
- Offers complimentary, high-speed wi-fi access to customers.
- Has a variety of seating options, including desk workspaces, tables, at least one bar, and lounge chairs.
- Offers a variety of food options, including hot and cold items.
- Offers a variety of beverage options, including hot and cold tea, soft drinks, wine, beer, and liquor.
- Offers complimentary local and national newspapers.
- Offers television services, including local and national news and live sporting events.
- Offers personalized customer service.
Throughout the term of the lease, the successful respondent shall pay a minimum annual guarantee (MAG) or percentage rent derived from gross sales, whichever is greater. The percentage rental rate shall be 13 percent of gross sales.
Respondents must meet the following minimum qualifications:
- At least three years of experience operating and managing an airport lounge within the last five years.
- Minimum annual gross sales in excess of $500,000 per lounge.
- Provide three business references.
- Provide evidence of financial capacity to design, construct, operate, and maintain concepts submitted in response.
- Provide evidence of ability to obtain required insurance.
- Provide response guarantee.
Procurement Information
Responsive and responsible responses will be evaluated by committee according to the following evaluation criteria (1,000 point total):
- Business Operations (300 points available)
- Qualifications/Experience (250 points available)
- Concept Design (250 points available)
- Financial (200 points available)
The highest-scored response will be recommended for contract award.
Contract Term
The term of the lease will be five years with two one-year options to extend the term, which may be exercised at the sole discretion of the Aviation Director.
Financial Impact
Each respondent must propose a MAG, which shall be greater than $350,000.
Concurrence/Previous Council Action
The Phoenix Aviation Advisory Board unanimously recommended approval on Oct. 19, 2017.
This item was recommended for approval by the Downtown, Aviation, Economy and Innovation Subcommittee on Dec. 6, 2017 by a vote of 3-0.
Location
Phoenix Sky Harbor International Airport is located at 3400 E. Sky Harbor Blvd.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Aviation Department.