The Wichita City Council on Tuesday delayed voting on an agreement with a Georgia company to develop a food court at Wichita’s new airport terminal.
Council members wanted clarity on federal regulations regarding the participation of disadvantaged businesses in the project.
The council was poised to approve a deal with MSE Branded Foods, of Gainesville, Ga., to put a branch of Wichita’s River City Brewing Co., plus national chains Dunkin’ Donuts and Chick-fil-A, in a new food court at the Wichita Dwight D. Eisenhower National Airport terminal.
The council decided to postpone the vote until July 1 after Micale Habtemariam, of Multi-Business Service Corp., complained that disadvantaged businesses weren’t treated fairly in the bidding process.
Habtemariam argued that a requirement that concessionaires put up an initial investment of $350 per square foot to build out the new terminal effectively eliminated his business from the bidding process.
“You were either a big boy or you did not exist,” he told council members.
Multi-Business Service Corp. is a family-owned business that has operated a cafe, shuttle operation and massage chairs and provided other services at Wichita Mid-Continent Airport for 23 years.
Habtemariam said his business should have been allowed to submit a bid on only a portion of the airport, rather than the whole airport, which would have required an investment of several million dollars. That’s how Multi-Business Service Corp. was able to start out at Mid-Continent in 1991, he told council members.
Victor White, director of airports for the city of Wichita, said the airport accepted bids for the entire airport from developers who had the experience to be the prime concessionaire. Multi-Business Service Corp. didn’t have the financial capability to do that, he said.
White said Habtemariam had the opportunity to make a deal with other bidders. The winning bid from MSE included a disadvantaged business enterprise – or DBE – Taylor Food Service, of Atlanta.
He said Habtemariam came to a pre-proposal meeting and didn’t ask any questions or raise any issues about the process.
Habtemariam also said a goal of the federal government of 4.5 percent DBE participation in the concessions at the new terminal was “insulting.”
The Federal Aviation Administration requires that at least 4.5 percent of the total revenue from concessionaires at the terminal come from state-certified DBEs.
That number changes every three years, White said. It is based on a complicated formula that includes the number of ready, willing and able businesses that are certified by the state of Kansas as DBEs. The problem has been that until recently there has been only one such firm, Multi-Business Service Corp.
White said the 4.5 percent already is covered by the DBE that new operator is bringing in. Taylor Foods has been certified as a DBE in Kansas. But he also said the airport is going to encourage MSE to find other firms. White said he’d reach out to MSE’s chief executive about that.
Mayor Carl Brewer called the 4.5 percent goal “ridiculous.” He thought it should be at least 10 percent.
White said the airport had to follow federal regulations and isn’t allowed to arbitrarily raise the goal.
Brewer questioned the suggestion that it was somehow wrong to try to do that.
White agreed that it sounded bizarre and contrary to common sense.
“But that’s the rule they’ve given us to play with,” he told Brewer.
Janet Miller asked White to provide council members with the actual language of the federal DBE requirement.
The council also had concerns that River City Brewery Co. is the only local business that will be in the new terminal. White said efforts had been made to contact other local businesses but none submitted a bid.
Under federal regulations, businesses that currently operate at Mid-Continent can’t automatically move into the new terminal, no matter how successful they’ve been, he said.
“It has to start from scratch,” White said.
Current employees at Mid-Continent will be given hiring priority, he said.
Lavonta Williams asked White if there still is an opportunity for local businesses to apply.
“I suppose there’s a way, but I don’t want to give you false hopes that will happen,” White said.