McCarran looks to land minority businesses

The Clark County Department of Aviation will look at ways to change its concession approval process in order to bring in more minority-owned businesses at McCarran International Airport.

The county now sets targets for the number of retail spots to be filled by local owners, with the total running at two-thirds of the 67 spaces. But "local" can include companies such as MGM Resorts International, which had souvenir stores in the airport in the past.

To open avenues for minorities, a particular push of county commissioners Lawrence Weekly and Chris Giunchigliani, airport management will look at ways to also take the size of the business into account. In laying out the concept to the commissioners on Tuesday, Aviation Director Randall Walker said federal law precludes the country from creating specific ethnic or gender targets, but adopting a small business enterprise definition based on U.S. Small Business Administration standards would indirectly move in that direction.

As part of winning approval for a new master food and beverage concession at the airport on Tuesday, the HMS division of Host International agreed to change its sub-contractor selections to emphasize small businesses, as well as local firms.

The U.S. Department of Transportation imposes its own rules for boosting minority concessions. Following court rulings concerning another airport, McCarran conducted a study to determine what it could do. An outside consultant determined that 17.8 percent of the nonairline airport business volume should go to women- and minority-owned businesses, generally mirroring the makeup of Las Vegas as a whole.

But the airport's overall total exceeded the goal, at 23.1 percent, so federal rules prohibit using techniques such setting aside business for certain groups or giving minorities extra points in evaluating bids. This limits the airport to simply encouraging minorities to bid on airport work.

Weekly, who has pushed the issue for several years, called the airport's record "horrible" in the past. However, he also acknowledged that some minority businesses that have gained entry to the airport had failed, and that efforts to recruit minority businesses have improved.

In a separate matter, HMSHost gained a 10-year extension of its term as a master concessionaire from 2018 to 2028 in return for a commitment to spend at least $41.6 million on facilities over the next 13 years. HMSHost oversees all the food and beverage locations at the airport as sublessees. Out of the total, $20.2 million will go into Terminal 3, which is under construction and due to open next June. In addition, it will install a Pei Wei Asian Diner in Concourse C and a restaurant in Concourse D, plus allocate $10 million for periodic upgrades of existing places.

"The No. 1 complaint we receive is the lack of sit-down places to eat," said Scott Kichline, the airport's manager of commercial and business development.

The California Pizza Kitchen in Concourse D often has lines, and the food outlets in Concourse C are also crowded. The latter building was originally designed for far fewer daily flights than Southwest Airlines runs through it. Walker said Southwest proposed taking out gate C-18 to add the Pei Wei for its passengers.

Host also waived the buyout provisions for its concessions in Terminal 2, which will close once Terminal 3 opens. This saved the airport more than $1 million, Walker estimated.

Host also wanted the extra term to recoup its investment.

As part of the deal, Host gave up its exclusive right to sell sodas in the airport, allowing newsstands to stock it as well. Walker said that some tests of changing the product mix resulted in greater revenues for the airport, although HMSHost sales in this category slipped.

Contact reporter Tim O'Reiley at
toreiley@reviewjournal.com or 702-387-5290.