Three years ago, concessionaires at O’Hare and Midway airports — who either had shut down entirely or saw revenue plummet during the pandemic — got what was supposed to be a temporary lifeline from the city.
Concessionaires who agreed to keep their employees got their rent and fees waived or dramatically reduced. So-called “minimum annual guarantees” were deferred until they reached 75% of pre-pandemic sales — and then were to be repaid without interest, even after that rebound. Security deposits, letters of credit and maximum operating space requirements were relaxed. Kiosks, food carts and mobile drink dispensers were authorized to boost sales.
Now, Mayor Lori Lightfoot wants to keep at least some of those relief measures in place with the potential for contract extensions that could last as long as five years.
Presiding over Wednesday’s City Council meeting, her last as mayor, Lightfoot introduced an ordinance that would empower Aviation Commissioner Jamie Rhee to negotiate new and more “limited relief” for O’Hare and Midway concessionaires, some of whom were forced to delay construction projects during the pandemic.
The timing of the three-year extension — just weeks before the traditional summer travel surge — seems curious, to say the least. But it shouldn’t, according to Aviation Department spokesperson Kevin Bargnes.
In an email to the Sun-Times, Bargnes noted that, while passenger volume has increased at O’Hare, it’s still below 2019 levels, “chiefly due to international travel, which has been slow to recover.” Last year, O’Hare served 80.7% of pre-pandemic passengers.
Midway reached 95.5 %, thanks to surging domestic leisure travel. Still, though passenger volume has nearly returned, the pandemic has “caused additional impacts on concessions, crucially through the major supply chain issues that have affected both operational and construction materials and through labor shortages,” Bargnes wrote.
“These factors continue to impact concessionaires at both airports, even as passenger numbers improve, particularly in their efforts to develop and open new concessions in a timely manner,” Bargnes wrote.
The need for continued relief is “greatest at Midway,” where concessionaires need contract extension to obtain financing needed to start building out new spaces, the Aviation Department spokesman said.
“Many have been unable to begin this work until now due to these ongoing effects of the pandemic. In order to obtain the financing necessary to complete these buildouts, these small-business owners at Midway need relief … on their buildout schedules and the length of their operating agreements,” Bargnes wrote.
The continued lifeline may look like an attempt to tie Johnson’s hands, but actually buys the new mayor time he needs to make a smooth transition to airport operations, according to Bargnes.
It allows the Aviation Department, whether or not Rhee is retained as commissioner, to “maintain existing contracts and provide time for the incoming administration to provide substantial input into the planned concessions request for proposals ... in the core terminals” at O’Hare, Bargnes wrote.
In a news release announcing the new lifeline, Rhee noted the levels of minority and women’s participation at Chicago airports — known in federal circles as “disadvantaged business enterprises” — are among the “highest in America.” It’s 55% at Midway and 38% at O’Hare.
Lightfoot was quoted as saying that, even as the travel and tourism industry recovers “one segment that continues to lag behind is airport concessionaires, many of whom are local, small-business owners that were nearly wiped out by the sudden falloff in passenger traffic.”
The ordinance enhances the city’s ability to “amend agreements already approve by City Council on limited terms in an effort to make Chicago’s concession partners whole,” she said.
The last Council meeting of the four-year term was short on official business and long on emotion. But alderpersons still managed to squeeze in some official business.
• Two new Police Board members were confirmed — Andreas Safakas and Aja Favors. They are the first nominated by an interim civilian oversight commission.
• Landmark status was granted to Promontory Point east of South DuSable Lake Shore Drive between 54th and 56th Streets. The designation was a decadeslong crusade for retiring 5th Ward Ald. Leslie Hairston.
• The Council also signed off on a $205,000 settlement with former Wheaton College students who claimed they were denied their constitutional rights to freedom of speech and religion by being kicked out of Millennium Park for distributing religious literature.
• A water supply contract with Joliet was approved. Chicago’s water system is expected to receive $30 million in annual revenue once Lake Michigan water is delivered to Joliet, starting in 2030.
• Lightfoot sought authority to seek to acquire a former Army National Guard Armory from the state and use it for “operational purposes” at Midway Airport. The 75,000-square-foot armory — on 4 acres at 5400 W. 63rd St. — has been vacant since 2017.
• A new contract with AFSCME Council 31 and a new salary schedule for the city’s senior managers were ratified.
• A requirement mandating the Department of Housing to produce annual reports on housing in general and efforts to reduce homelessness in particular was approved.
