Lucrative concession award for new airport terminal frustrates local business
A local business owner is asking Missoula International Airport to reconsider its choice of vendors for concession services in the new south concourse, saying the bidder would siphon revenue from the city's economy.
But the airport, which will announce the concession contract later this month, said the winning bidder will actually give a number of Missoula vendors presence in the new terminal when it opens in early 2022.
Scott Billadeau, founder and CEO of Liquid Planet, took his concerns to the Missoula County Airport Authority last week. He said the new concession agreement, awarded to an out-of-state bidder, represents a value of roughly $50 million to $60 million over 20 years, which is the length of the contract.
“Economists will tell you that local money travels through the local economy approximately four times, which would put the value of that revenue closer to about quarter of a billion dollars,” Billadeau told the board. “I hope that's a consideration as this is deliberated.”
Billadeau, who started Liquid Planet from a delivery van on the University of Montana campus, expanded his business downtown in 2003. That was followed in 2004 when Liquid Planet built a presence at the airport.
In those early years, his airport business generated just a few thousand dollars a month. Since then, Billadeau said, Liquid Planet has invested “hundreds of thousands” of dollars into its airport space and it cleared $1 million in revenue two years ago.
Billadeau said he was disappointed in the airport's selection of vendors.
“I think we're a pretty good operator,” Billadeau told the board. “I've been here 16 years operating and you're building a brand new airport without us. It's not right to build a new airport without us. I love the airport and thought we were going to be a big part of it.”
As part of its terminal project, the airport last year sent out a request for proposals to all concessionaires interested in providing service from a bar and restaurant space planned in the new south concourse, which is currently under construction.
The airport selected six final bids and pared those down to three, including Pangea Restaurant Group, which is owned by Billadeau. While the airport hasn't officially announced the winning bidder, it said Pangea came in second during a lengthy scoring process.
“We're a public agency and we have no exclusive contracts with anyone, and we have a fairly rigid procurement process,” airport director Cris Jensen said on Monday. “The process is as objective as we can possibly make it.”
The airport authority has been discussing the new concession contract for the last six months and it plans to announce the winning vendor at the end of March.
While Jensen couldn't disclose who the winning vendor was, he said the contract would place a number of local companies inside the new concourse, giving them a presence in the airport for the first time.
Last year, nearly 1 million passengers flew from Missoula.
“It'll make a whole lot more sense when we announce who we did select,” Jensen said. “We had six really good proposals, but we had three we interviewed. It's always a very emotional thing. It was a much debated topic and we don't take it lightly.”
While the airport has selected another vendor for the south concourse, work on the east concourse could begin sooner than anticipated. Jensen said it will also include concession space and Liquid Planet will be asked to submit a bid.
That work could begin in 2022 starting with the removal of the old terminal, where Liquid Planet is currently located. The company's airport contract is up in 2024.
“One of the things that gets lost in this is that his contract for his current space was going to expire at the end in 2024,” Jensen said. “He would have had to rebid on that. As a public agency, we have to put it out to bid at the end of the contract.”
In a letter to the Missoula Chamber, Billadeau said the airport shouldn't be encumbered by federal regulations when selecting contractors.
“My hope would be that our local Chamber of Commerce, and our U.S. senators would send a clear and strong message to the airport to 'take care of Missoula, Montana, and we'll take care of Washington, D.C.,' ” said Billadeau. “In other words, don't worry about the FAA stipulations that make it appear that no weight can be given to local operators.”
Jensen said the airport planned to meet with Billadeau this week.