TITLE
Recommendation to authorize City Manager to amend Concession Agreement No. 29276 between the City of Long Beach and SSP America, Inc., replacing the $500,000 mid-term refurbishment requirement with a $175,000 one-time payment, eliminating the Minimum Annual Guarantee requirement, and allowing for an early termination of the Agreement. (District 5)
DISCUSSION
The City of Long Beach (City) entered into Concession Aqreernent No. 29276 with Creative Host Services, Inc., on October 7,2005. The purpose of the Agreement (Agreement) with Creative Host Services, Inc., now SSP America, Inc. (SSP America), was to provide food and beverage concession services to passengers and employees of the Long Beach Airport (Airport).
Spaces allocated to SSP America consisted of both exclusive and non-exclusive areas, with the latter located primarily within the Temporary Boarding Lounges in use at the time. The Agreement had a term of ten years, with a five-year extension option.
In 2011, the Airport commenced the Request for Proposal (RFP) process for all concessions in the New Passenger Concourse (Concourse), which opened the following year. Although SSP America was one of the companies submitting proposals, another company was selected to operate the concessions in the Concourse.
The current SSP America-operated facilities at the Airport consist of a restaurant and snack bar in the Terminal Building, along with two adjacent outdoor kiosks. As the vast majority of concession sales take place in the post-security environment of the Concourse, SSP America's sales at the Airport have decreased significantly, falling over 70 percent versus prior periods.
SSP America is requesting that it be allowed to terminate its Agreement with the City prior to the current expiration date in October 2015. In addition, citing a materially changed business environment due to the opening of the Concourse, SSP America is requesting that the $500,000 mid-term facility refurbishment, requir...
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