Mihalopoulos: Insiders’ deal to land Midway concessions delayed

SHARE Mihalopoulos: Insiders’ deal to land Midway concessions delayed

Mayor Rahm Emanuel looks over the proposed layout of new concessions at Midway Airport in August 2015, with Midway manager Erin O’Donnell. | Sun-Times files

More than a year after a stampede of clout players put forward proposals, Mayor Rahm Emanuel’s administration still has not closed a deal on a major planned revamping of Midway Airport’s concessions.

Landing the deal will be highly lucrative — concessions at the airport took in a total of about $89 million in 2014 — and three teams presented bids for running restaurants and shops at Midway a year ago.

After evaluating the proposals for less than six weeks, city officials picked a “tentative” winner last March 3, with negotiations beginning nine days later, an Aviation Department document shows.

Those talks continued in December, when Emanuel’s aviation commissioner, Ginger Evans, shared the document — marked as confidential — with aldermen. At the time, it remained “to be determined” when the new deal would be put before the Chicago City Council for approval, according to the document.

The deal is not yet done, a city Aviation Department spokesman said Tuesday.

Sources say Evans told aldermen in closed-door meetings last month that the deal was delayed by complaints against a member of the preferred bid team.

In June, a labor union that represents airport concession workers sent a letter to the U.S. Department of Transportation. A lawyer for UNITE HERE Local 1 requested an investigation into the politically connected Rand family, which has sold food and drinks at Midway for many years.

Timothy Rand’s Midway Airport Concessionaires reported 2014 revenues of more than $30 million, making it the biggest beneficiary of the status quo at the airport. The deal expired the year before last, but he’s continued to hold onto the business since then as the bid process for the new deal has languished with no public explanation from City Hall.

The city had let Rand’s company continue to keep its Midway contract even though his net worth far exceeded the federal limit for minority firms that enjoy preferential status in winning business at the nation’s airports.

Now, a company led by Geneva Mansaw — the widow of Rand’s late father — is part of the Emanuel administration’s preferred bidding team for the new concessions deal.

In the letter to the federal Department of Transportation’s inspector general, a lawyer for UNITE HERE presented city documents showing close ties between Rand’s Midway Airport Concessionaires and Mansaw’s NorthAmerican Concessions Inc.

“We request that your office investigate whether NorthAmerican Concessions is controlled by its president and whether she is an economically disadvantaged individual sufficient to qualify” her company for preferential treatment in the bid process, wrote the lawyer, who did not return calls seeking comment.

U.S. Transportation Department officials also did not return calls.

Asked Tuesday about the union complaint to federal authorities, Rand said, “That has been resolved.”

As for the new Midway bid, Rand said, “Everything is pending.” He said he was too busy to say anything more.

I reported last March that Mansaw’s NorthAmerican Concessionaires is part of the clout-heavy bid team led by Virginia-based SSP America and the Hudson Group of New Jersey. The team also includes longtime Emanuel allies Becky Carroll and Martin Cabrera and features such brands as Calvin Klein, Billy Goat Tavern, Intelligentsia Coffee and Cooper’s Hawk, according to bid documents.

City records show SSP America has paid $360,000 in lobbying fees to John Dunn, a former top aide to Mayor Richard M. Daley, and more than $200,000 to other City Hall lobbyists, including John Borovicka — who worked for Emanuel when Emanuel was a congressman.

A spokeswoman for SSP America declined to comment: “We’d have to let the airport and the city respond to any inquiries.”

Owen Kilmer, a spokesman for Emanuel’s Aviation Department, said: “We are still working on completing our due diligence. We need to ensure that we are moving forward with the best concessions program for the city and its airport, and we know that we must put the best possible product before City Council in order to seek final approval.”

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