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CONCESSIONS/PROCUREMENT COMMITTEE (CPC) AGENDA

DATE: December 5, 2018 DAY: Wednesday TIME: 1:00 p.m.

LOCATION: Carl T. Langford Board Room One Jeff Fuqua Blvd. Orlando, FL 32827

I. CALL TO ORDER

II. ANNOUNCEMENTS - Appeal Process and Lobbying Activities

NOTE: If anyone is aggrieved by any of the proceedings of today’s meeting and wishes to appeal the results of actions made by this Committee, they must file an appeal stating the item they wish to appeal and the basis for which they wish to appeal. Any decision made at these meetings will need record of the proceedings and for that purpose may need to ensure that a verbatim record of the proceeding is made which includes the testimony and evidence upon which the appeal is to be based. Any appeal must be received in writing by the Chief Executive Officer, Mr. Phillip N. Brown, in his office at One Jeff Fuqua Boulevard, Main Terminal Building by Wednesday, December 12, 2018 at 4:00 p.m.

For individuals who conduct lobbying activities with Aviation Authority employees or Board members, registration with the Aviation Authority is required each year prior to conducting any lobbying activities. A statement of expenditures incurred in connection with those lobbying instances should also be filed prior to April 1 of each year for the preceding year. As of January 16, 2013, lobbying any Aviation Authority Staff who are members of any committee responsible for ranking Proposals, Letters of Interest, Statements of Qualifications or Bids and thereafter forwarding those recommendations to the Board and/or Board Members is prohibited from the time that a Request for Proposals, Request for Letters of Interests, Request for Qualifications or Request for Bids is released to the time that the Board makes an award. As adopted by the Board on September 19, 2012, lobbyists are required to sign-in at the Aviation Authority offices prior to any meetings with Staff or Board members. In the event a lobbyist meets with or otherwise communicates with Staff or a Board member at a location other than the Aviation Authority offices, including the Mayor of the City of Orlando or the Mayor of Orange County, at their offices, the lobbyist shall file a Notice of Lobbying (Form 4) detailing each instance of lobbying to the Aviation Authority within 7 calendar days of such lobbying. As of January 16, 2013, lobbyists will also provide a notice to the Aviation Authority when meeting with the Mayor of the City of Orlando or the Mayor of Orange County at their offices. The policy, forms, and instructions are available in the Aviation Authority’s offices and the web site. Please contact the Director of Board Services with questions at (407) 825-2032.

III. NEW BUSINESS

A. Review of Proposals Received for the STC Retail Package 2 Concessions at Orlando InternationalAirport

NEXT SCHEDULED CONCESSIONS/PROCUREMENT COMMITTEE MEETING IS ON MONDAY, DECEMBER 17, 2018

NEW BUSINESS ITEM – A -

______ GREATER ORLANDO AVIATION AUTHORITY

Orlando International Airport One Jeff Fuqua Boulevard

Orlando, Florida 32827-4399 MEMORANDUM To: Members of the Concessions/Procurement Committee From: Tracy Harris, Manager of Concessions Date: December 5, 2018 ITEM DESCRIPTION Review of Proposals Received for the STC Retail Package 2 Concession at Orlando International Airport BACKGROUND A Request for Proposals (RFP) was issued on August 27, 2018, for the STC Retail Package 2 Concession at Orlando International Airport. The Aviation Authority will grant the successful Proposer the non-exclusive right and privilege, and the successful Proposer shall assume the obligation to rent, occupy, equip, furnish and maintain the facilities for the operation of two newsstands with coffee/bakery, one newsstand, and one news and gift shop concession. The Premises consists of approximately 4,750 square feet of sales and display space located on Level 2 of the South Terminal Complex as follows:

Location

Concept

Square Feet

Pre-Security, Unit LS-A Newsstand 400

West Concourse, Unit P Newsstand with Coffee 1,100

North Concourse, Unit R Newsstand with Coffee/Bakery 2,000

South Concourse, Unit X Newsstand and Gifts 1,250

Total Square Feet 4,750

The Term shall commence on the day the Aviation Authority opens South Terminal C to the public and shall expire on the 7th anniversary of commencement. The Evaluation Criteria for this RFP is attached as Attachment A. ISSUES

The Aviation Authority received the following Proposals, listed in alphabetical order:

• HG Orlando Retailers 2018 JV (HG Orlando) • The Marshall Retail Group, LLC (Marshall) • Newslink of Orlando, LLC (NewsLink) • Stellar DML GCG MCO, LLC (Stellar)

Staff’s findings by Proposal are attached as Attachment B. FISCAL IMPACT The successful Proposer will pay to the Aviation Authority a Concession Fee in an amount equal to the greater of (1) a Minimum Annual Concession Fee of $1,000,000.00 or (2) a percentage of Gross Receipts equal to the sum of the successful Proposer’s proposed percentage times the Gross Receipts for all sales. RECOMMENDED ACTION Staff respectfully requests that the Concessions/Procurement Committee review the proposals received for the STC Retail Package 2 Concession RFP and rank the Proposals in accordance with the Evaluation Criteria established for the RFP.

Attachment A Evaluation Criteria

It is the Aviation Authority’s intent to recommend award to the responsible and responsive Proposer with the Proposal that is most favorable to the Aviation Authority. The evaluation criteria used for evaluation include Evaluation Criteria Rated as Satisfactory or Unsatisfactory and Evaluation Criteria Rated According to Strength Demonstrated in Proposal as follows: Evaluation Criteria Rated as Satisfactory or Unsatisfactory • Financial Capability. Proposer’s financial information must show the financial

ability to meet its existing obligations and those to be undertaken if successful in being awarded the Concession at the Airport. In the event the information provided is deemed insufficient, then the successful Proposer may be required to post a 100% contract bond or letter of credit for the Minimum Annual Concession Fee.

• Reputation. Reputation will be considered based upon the information provided by Proposers’ references, or as otherwise determined by the Aviation Authority. A poor reference or multiple non-responsive references may result in an unsatisfactory rating.

• ACDBE Participation. ACDBE participation should meet or exceed the Aviation Authority’s goal, with legitimate participation in the management and operation of the Concession. If unable to reach the goal, such Proposer(s) must provide sufficient evidence of Good Faith Efforts to reach the goal with its proposal. The ACDBE Goal for this opportunity is 30%.

Evaluation Criteria Rated According to Strength Demonstrated in Proposal

• Demonstrated Experience and Qualifications. Ranking for this criterion will be based upon the information submitted for the experience and qualifications of the Proposer in operating a news, gifts, and coffee/bakery concession. Material litigation and investigation will be considered in this criterion.

• Customer Service and Marketing. Ranking for this criterion will be based on the extent to which the customer service approach and training will further the Aviation Authority’s goal of improved overall customer service and the likely success of the marketing program.

• Concepts and Quality, Variety and Price Range of Items. Concepts whether national, regional or local should have a recognized public appeal. Local and unique concepts are desirable and encouraged. Proposed news, gifts, and coffee/bakery items are expected to be of high quality and a variety of items. Prices should be reasonable when considering the proposed products and brands.

• Concession Improvements. Proposed Improvements should present a visually appealing Concession space intended to maximize appeal to the traveler while remaining true to The Orlando Experience®. The proposed Improvements will be considered for evaluation purposes only and will be subject to further review and approval by the Aviation Authority after award. The minimum expenditure in improvements for this opportunity is not less than $500.00 per square foot for a total of not less than $2,375,000.00 for the Premises. This is in addition to the required Infrastructure Contribution that the successful Proposer will pay to the Aviation Authority in the amount of $1,280,000.00.

• Financial Return to the Aviation Authority. Ranking for this criterion will be based upon a review of the proposed Percentage of Gross Receipts after consideration of the reasonableness of the information presented, and the assumptions supporting the budget and pro forma submitted by Proposers.

Attachment B

Findings by Proposal

The Aviation Authority’s Finance Department, Office of Small Business Development and General Consultant have each provided an attached memoranda of their findings. HG Orlando Retailers 2018 JV (HG Orlando) Financial Capability. HG Orlando presented audited financial statements for two years. Finance recommends a fifty percent (50%) contract bond or letter of credit and the financials presented are acceptable. Reputation. References submitted to the Aviation Authority for HG Orlando from Fort Lauderdale, City of Dallas – Dallas Love Field Airport, Seattle-Tacoma and JFK International airports were all favorable. ACDBE Participation. If selected, HG Orlando proposes 30% participation through a joint venture between Hudson Group (HG) Retail, LLC (70%) and four ACDBE companies, Perez of Florida, Inc. (10%), Transglobal Concessions, LLC (8%), Newburns Management Group, LLC (8%), and GTLC Hospitality Group, LLC (4%). The ACDBE firms’ scope of work is clearly defined and distinct from Hudson Group’s scope of work. The 30% ACDBE participation proposed by HG Orlando is based upon the projected revenues for the ACDBE’s space out of the total projected sales for all concepts under the concession package and is equal to the collective ACDBE partners’ interest in the JV. Experience and Qualifications. Hudson Group Retail, LLC, the majority owner, specializes in operating news, gift, book, specialty retail, food & beverage and duty-free concessions in airports. Hudson Group operates 1,009 stores, over 90% of which are in airports throughout the U.S. and Canada. Hudson Group’s stores generated over $1 billion in annual revenues in each of the last four years. HG Orlando disclosed litigation as required. Legal counsel determined that the legal disclosures were acceptable. HG Orlando indicated that it was not the subject of any criminal investigations. Customer Service and Marketing. As part of the Hudson Group brand, HG Orlando's customer service program is focused on creating the Traveler's Best Friend Experience. The Traveler’s Best Friend Training includes six curriculum categories from onboarding to leadership skills and provides in-depth task related training (e.g. register training, cash reconciliation, merchandising, as well as interpersonal skills (e.g. communications, empathy). HG Orlando's core values as the foundation of great customer service includes service, respect, passion, dedication, teamwork, and innovation. A mystery shopper program is used to address any performance gaps and identify outstanding customer service. Social media is used to monitor customer feedback and immediate response to customer service issues. HG Orlando's Travel Retail University program includes product training, display creating, merchandising strategies, and sales and marketing techniques to help associates learn to explain, sell and present their products. HG Orlando will implement various promotions and seasonal programs to match the unique attributes of each market such as military personnel promotions, and airline and airport employee promotions. Concept and Quality, Variety and Price Range of Items HG Orlando proposed the following concepts: Orlando Magazine, City Beautiful Market & ZaZa’s, Hudson/Dunkin’ with an FAO Schwarz & Schweetz, and Sundial Shoppe by Hudson.

Concept Description of Concept Items Price Range

Orlando Magazine – The City’s Magazine (Pre-Security)

A local themed travel convenience concept offering three distinct zones: (1) News & Features, (2) Travel, and (3) Savor.

Magazines, Newspapers, Books

MSRP

Sundries, Health & Beauty Aids, Travel,

$0.99 - $249.00


Electronics

Snacks, Candy, Mints, Beverages

$1.99 - $19.99

City Beautiful Market & ZaZa’s

Locally inspired marketplace with locally branded Cuban gourmet coffee.

Food Menu

$0.75 - %13.00

Hot Beverages

$1.00 – $4.98

Bottled Beverages $2.25 - %4.89

Bagged Coffee

$11.50


MSRP

Sundries, Health & Beauty Aids, Travel, Electronics

$0.99 - $249.00


$1.99 - $19.99

Local/Regional Gifts & Souvenirs

$0.99 - $200.00

Hudson/Dunkin’ with an FAO Schwarz & Schweetz

A diverse mix of products including coffee and food items by Dunkin’, travel essentials by Hudson Retail, and toys, games and candy by the FAO Schartz & FAO Schweetz.

Cold & Frozen Beverages

From $1.55

Sandwiches From $3.19

Hot Beverages From $1.55

Donuts From $1.55


MSRP


$0.99 - $249.00


$1.99 - $19.99


$0.99 - $200.00

FAO Schwarz Branded Toys and Seasonal Décor

$25.00 - $200.00


FAO Schweetz $1.50 - $7.00

Sundial Shoppe by Hudson

A locally inspired travel essentials store offering four categories of merchandise – media, essentials, marketplace and destination.


MSRP


$0.99 - $249.00


$1.99 - $19.99


$0.99 - $200.00

Pursuant to the RFP documents, all units may sell single-serving prepackaged snacks. Addendum 2 further states that limited grab-and-go items, like prepackaged sandwiches and salads, may be sold in Unit P. ZaZa’s proposed inclusion of food bowls, if not pre-packaged, appear to fall outside the concept description for Newsstand with Coffee in Unit P. Similarly, pursuant to Addendum 2 to the Request for Proposals, local souvenirs are permitted to be sold in Unit LS-A, but should be kept to a minimum given the smaller retail space allocation for the unit. Additionally, Addendum 2 to the Request for Proposals, states that bulk candy will be limited to a maximum of 3% of the unit square footage allocated to retail. Hudson’s Dunkin’/FAO Schwarz & Schweetz proposed inclusion of toys and games appear to fall outside the concept description for Newsstand with Coffee/Bakery for Unit R. Concession Improvements. HG Orlando proposed a total initial investment in Improvements of $2,968,750, which exceeds the minimum per square foot investment required. Financial Return to the Aviation Authority. HG Orlando proposes to pay the Aviation Authority 22% percent of Gross Receipts. The Marshall Retail Group, LLC (Marshall) Financial Capability. Marshall submitted audited financial statements for two years. Finance recommends a fifty percent (50%) contract bond and the financials presented are acceptable. Reputation. References submitted for Marshall from Vancouver Airport Authority, Raleigh-Durham Airport Authority, McCarran International Airport and San Francisco International Airport were all favorable. ACDBE Participation. If selected, Marshall proposes 30% ACDBE participation through a sublease agreement with an ACDBE, AirPancho’s, LLC. In the proposal, AirPancho’s scope of work is clearly defined and distinct from Marshall’s scope of work. The 30% ACDBE participation proposed by Marshall is based upon the projected revenues for the ACDBE’s space out of the total projected sales for all concepts under the concession package. Experience and Qualifications. Marshall has over 60 years in travel retail experience in the direct management and operation of news, gift, and travel convenience with coffee and specialty retail businesses. These businesses generated $175 million in annual gross receipts for all locations combined by the end of Fiscal Year 2017. Marshall highlighted its operations and experience at San Francisco International

Airport and Denver International Airport as similar to that being offered at Orlando International Airport. Marshall stated that it did not have any applicable litigation to disclose. Legal counsel determined that this was satisfactory. Marshall indicated that it was not the subject of any criminal investigations. Customer Service and Marketing. Marshall’s customer service training is based upon creating unique customer experiences through their Power to WOW training program. Marshall will emphasize training and development of each team member throughout their career. Ongoing customer experience training is accomplished through mystery shopper program implemented, with assistance from a customer service company, to give managers access to customer service feedback for continual improvement, and to recognize employees demonstrating customer service excellence. Marshall uses innovations and technology to enhance customer experience, measure performance and take actions to maximize results. Marshall proposes to employ a tap and go point of sale terminal for cashless purchases, feature hand-held point of sale devices for use by employees to complete purchases anywhere in the store, and, where applicable, have tablet-sized point of sale locations. Marshall offers customers, the opportunity to buy an item and have it shipped to their home and will use QR codes to communicate with guests and promote local vendors. Concept and Quality, Variety and Price Range of Items Marshall proposed the following concepts: The Scoop, Replenish, Main Streets Market with Einstein Bros. Bagels & Caribou Coffee, and CityArts Market.


The Scoop (Pre-Security)

The Scoop offers Orlando original and local products alongside travel essentials, sundries and snacks.

Newspapers, Magazines, Books

MSRP

Stationery Papergoods & Office Supplies

$1.99 - $29.99

Electronics $3.99 - $299.99

Travel – Business Accessories

$1.99 - $39.99

Beverages $2.25 - $13.99

Cooler – Grab-n-Go $0.99 - $8.99

Packaged Snacks $0.99 - $7.99

Orlando & Florida Regional Apparel

$10.95 - $69.95

Orlando & Florida Licensed Sports

$10.95 - $69.95

Orlando & Florida Regional Souvenirs

$1.95 - $29.95

Concept Description of Concept Items Price Range Replenish – includes Nespresso Coffee Counter

Replenish serves as a source for travelers to find magazines, books, apparel, sandwiches, snacks, gifts, coffee and a Bevi Water Bar, a “hydration station” promoting a mix of all-natural flavors at the push of a button; local artisans’ wares and gourmet products.

Baked Goods $1.89 - $2.79

Coffees $2.50 - $7.00

Teas

$1.25 - $4.00

Iconic Creations $3.00 - $7.00


MSRP

Stationery, Papergoods & Office Supplies

$0.25 – 29.99



$1.99 - $39.99

Beverages $2.25 - $13.99

Cooler Grab-n-Go $0.99 - $8.99

Packaged Snacks

$0.99 - $7.99

Coffee & Baked Goods

$1.89 - $4.99


$10.95 - $69.95


$10.95 - $69.95


$1.95 - $29.95

Water Bar – Bevi $3.50 - $6.00

Seventh Avenue Apothecary

$9.00 - $30.00

To You Healthy Snacks

$2.25 - $3.50

Concept Description of Concept Items Price Range Wondermade $9.00 - $25.00

Raw Juice $8.00 - $10.00

Humble Bumble Kombucha

$11.00 - $13.00

Grimaldi Candy Company

$9.50 - $25.00

Naked Bar Soap Co.

$8.75 - $20.00

Winter Park Honey $3.25 - $14.00

Corkcicle $27.00 - $40.00

Wildflower Granola

$7.75 - $10.00

Wildflower Granola $7.75 - $10.00

Macaw Foods

$3.00 - $4.00

Main Street Market, Einstein Bros. Bagels & Caribou Coffee

A shopping emporium that offers a tailored assortment of gifts, periodicals, healthy snacks and juices with an emphasis on local vendors that provides a “marketplace” feel.


MSRP


$0.25 – 29.99



$1.99 - $39.99

Beverages $2.25 - $13.99


Packaged Snacks

$0.99 - $7.99

Coffee & Baked Goods

$0.75 - $4.99


$10.95 - $69.95


$10.95 - $69.95


$1.95 - $29.95

Concept Description of Concept Items Price Range Einstein Bros. Bagel & Topping

$0.60 - $1.59

Breakfast Bagels $4.99 - $5.99

Signature Sandwiches $6.69 - $7.49

Hot & Toasty $5.99 - $7.49

Chef’s Creations $5.69 – $6.49

Bagel Box $7.19 - $15.49

Tub of Schmear $3.99

Caribou Coffee Coffee

$1.99 - $4.19

Classics $1.90 - $5.19

Signature $4.59 - $5.39 +$0.80 custom

Blended $4.59 - $6.09

Tea $2.09 - $4.09

Nitro $4.49 - $4.99

CityArts Inspired by the local art community and fashioned after CityArts in Downtown Orlando, this newsstand concept appeals to a young, hip crowd amd will showcase local artists and upcoming events.


MSRP


$0.25 – 29.99



$1.99 - $39.99

Beverages $2.25 - $13.99


Packaged Snacks

$0.99 - $7.99


$10.95 - $69.95

Concept Description of Concept Items Price Range Orlando & Florida Regional Apparel

$10.95 - $69.95


$1.95 - $29.95

Pursuant to Addendum 2 to the Request for Proposals, local souvenirs are permitted to be sold in Unit LS-A, but should be kept to a minimum given the smaller retail space allocation for the unit. Scoop’s proposed inclusion of apparel, sports and local gift items appear to fall outside the concept description for Unit LS-A. Similarly, pursuant to the RFP documents, all units may sell single-serving pre-packaged snacks. Addendum 2 further states that no grab-and-go items, like prepackaged sandwiches and salads, may be sold in Unit LS-A and Unit X. Scoop’s and CityArts’ proposed inclusion of sandwiches and salads, etc., appear to fall outside the concept descriptions for Unit LS-A and Unit X. Concession Improvements. Marshall proposes an initial investment in Improvements in the amount of $3,593,200, which exceeds the minimum per square foot investment required. Financial Return to the Aviation Authority. Marshall proposes to pay the Aviation Authority 22% percent of Gross Receipts. Newslink of Orlando, LLC (NewsLink) Financial Capability. NewsLink submitted audited financial statements for two years. Finance recommends a fifty percent (50%) contract bond and the financials presented are acceptable. Reputation. References submitted to the Aviation Authority for NewsLink from Miami-Dade, Tampa International Airport, Massport, and Westfield Airports were all favorable. ACDBE Participation. If selected, NewsLink proposes 30% ACDBE participation through a joint venture between NewsLink Group, LLC (70%) and ACDBE, Canopy Hospitality Group, LLC (30%). Canopy’s scope of work is clearly defined and distinct from NewsLink’s scope of work. Experience and Qualifications. NewsLink has 59 years of experience operating airport concessions. NewsLink highlighted Miami and Tampa International Airports as their two similar airport operations. NewsLink disclosed litigation as required. Legal counsel determined that the disclosures are satisfactory. NewsLink indicated that it was not the subject of any criminal investigations. Customer Service and Marketing. NewsLink is committed to supporting the Aviation Authority's customer service program and integrating its goals and policies into SuccessLink, NewsLink’s multi-tier, service-oriented employee training program. NewsLink has a Department of Experience that exists solely to understand and improve its employees and customers’ experience. They have a dedicated Manager of Experience at each airport to help train and evaluate employees, analyze customer feedback, and conduct weekly inspections of displays and customer service. NewsLink will use, among other things, an external mystery shopper program to measure customer service, facilities management, and sale abilities. NewsLink will use the ZoomShift app to adjust schedules to match passenger travel flow habits. NewsLink highlighted its employees’ competitive benefits and pay, with a starting wage at Orlando International Airport of $15.00/hour. NewsLink has a four-prong strategy for approaching sales and marketing: education, activation, collaboration and evaluation. NewsLink will offer holiday promotions, special events, coupons, gifts with purchase, sales events, and in-store book signings to engage with customers. NewsLink proposes to collaborate on a

variety of cross-promotional initiatives with airport concessionaire neighbors, airlines, and the airport to boost sales and the profile of its stores. Concept and Quality, Variety and Price Range of Items NewsLink proposed the following concepts: NewsLink, Lineage News & Coffee, Peet’s Coffee & NewsLink, and Air Essentials.

Concept Description of Concept

Items Price Range

NewsLink (Pre-Security)

Full offering of newsstand products including publications, candy, snacks, beverages and travel essentials.

Beverages

$2.49 - $6.99

Gourmet Food, Candy & Snacks

$0.99 - $19.99

Health & Beauty

0.79 - $24.99

Publications

MSRP

Travel Essentials

$4.95 - $89.99

Lineage News & Coffee

Orlando owned and operated business with a strong local following; offers retail newsstand component with gourmet coffee component; uses fair trade beans.

Cold Brew Coffee

$2.99 - $3.99

Full Serve Coffee

$2.49 - $4.99

Beverages

$2.49 - $6.99

Grab N Go Market

$2.99 - $10.99

Local Baked Goods $1.49 - $15.00


$0.99 - $19.99

Health & Beauty

$0.79 - $24.99

Publications

Cover Price

Travel Essentials

$4.95 - $49.99

Peet’s Coffee & NewsLink

Integrated newsstand and coffee concept offering No. 2 coffee brand in the U.S. behind Starbucks.

Cold Brew Coffee $2.99 - $3.99

Full Serve Coffee $2.49 - $4.99

Beverages

$2.49 - $6.99

Grab N Go Market

$1.99 - $12.99

Local Baked Goods $1.49 - $15.00

Concept Description of Concept

Items Price Range


$0.99 - $32.00

Souvenirs & Gifts

$4.99 - $100.00

Health & Beauty

$0.79 - $24.99

Publications

Cover Price

Travel Essentials

$4.95 - $89.99

Air Essentials Florida based newsstand concept providing travelers with the “essentials” as well as a wide variety of local gifts.

Beverages

$2.49 - $6.99


$0.99 - $32.00

Souvenirs & Gifts

$4.99 - $100.00

Health & Beauty

$0.79 - $25.00

Publications

Cover Price

Travel Essentials

$4.95 - $89.99

Concession Improvements. NewsLink proposes an initial investment in Improvements in the amount of $2,850,000, which exceeds the minimum per square foot investment required. Financial Return to the Aviation Authority. NewsLink proposes to pay the Aviation Authority 21% percent of Gross Receipts. Stellar DML GCG MCO, LLC (Stellar)

Financial Capability. Stellar submitted audited financial statements for two years. Finance recommends a fifty percent (50%) contract bond and the financials presented are acceptable. Reputation. References submitted to the Aviation Authority for Stellar from Miami, Tampa, Philadelphia and San Diego International Airports were all favorable. ACDBE Participation. If selected, Stellar proposes 30% ACDBE participation through a joint venture between Stellar Partners, Inc (63%) and two ACDBE companies, Diamarx Management, LLC (18.5%) and Global Concessions Group, LLC (18.5%), and through a proposed sublease with Host LDL MCO FB, LLC, a joint venture partially owned by ACDBE company, Lago Dora, LLC, for the operation of the Starbucks location within Unit R. The 30% ACDBE participation proposed by Stellar is based upon the projected revenues attributable to the ACDBEs operations and subconcession space out of the total projected sales for all concepts under the concession package. The collective ACDBE partners’ interest in the Stellar JV is 37%. Experience and Qualifications. Stellar Partners, Inc., the managing member, has been operating news and gift locations for almost 30 years. Stellar highlighted Orlando International and Tampa International Airports as similar operations to Orlando

International Airport. Stellar indicated that there was no applicable litigation filed by or against it, or its Affiliates in the last 5 years in which the amount in dispute was at least $1,000,000 or a suit in equity involving an airport. Legal counsel identified certain litigation involving Host International, Inc., Stellar’s parent company, that was not disclosed but that appeared to fall within the disclosure requirements. Stellar provided litigation in response to Legal counsel’s request for clarification. A summary of the litigation is included in the attached memorandum from legal counsel. Upon review of the clarification provided, legal counsel determined that the disclosure was satisfactory. Stellar indicated that it was not the subject of any criminal investigations. Customer Service and Marketing. Stellar invests a minimum of 2% of the annual budget in training. Stellar’s comprehensive customer service training program details every aspect of the customer experience. Before serving the first guest, each associate is thoroughly trained and fully knowledgeable about the products and services available in-store. Associates are also expected to be fully knowledgeable of the terminal facilities and amenities. This prepares them to assist customers in every way possible. Stellar highlighted its average mystery shop score of 94%. Through Stellar’s sales and marketing training, associates learn up-selling techniques that add incremental sales and increase customer satisfaction and how to display products to give the store a clean, uncluttered, and visually appealing appearance. Concept and Quality, Variety and Price Range of Items Stellar proposed the following concepts: Stellar News Express, Foxtail Coffee & News, Travel & Leisure/ Starbucks, and Orlando Weekly.


Stellar News Express (Pre-Security)

A Florida brand offering a product assortment including newsstand publications, travel essentials, sundries and health and beauty products and snacks and beverages.

Publications

MSRP

Sundries, Health & Beauty

$1.99 - $24.99

Travel & Business Accessories

$3.99 - $59.99

Travel Electronics & Electronic Accessories

$7.99 - $129.99

Snacks & Beverages

$1.29 - $12.99

Foxtail Coffee & News

A Local coffee brand brewing only fair-trade, environmentally -conscious coffee, matcha, chai tea lattes and hot chocolate.

Publications MSRP


$1.99 - $24.99


$3.99 - $59.99

Travel Electronics & Electronic Accessories

$7.99 - $129.99

Snacks & Beverages

$1.29 - $12.99

Espresso

$2.75 – $4.75

Brewed Coffee

$2.50 - $3.00

Other Drinks

$3.75 - $5.00

Beans-to-Go $12.00


Cold Brew-to-Go $5.00 - $25.00

Baked Goods $1.89 - $12.99

Small Plates $3.75 - $7.50

Foxtail Favorites

$4.50 - $5.25

Fresh Wraps $7.25 - $8.25

Bottled Beverages $2.99 - $4.59

Kids Sandwiches $5.00

Kids Beverages $3.00

Travel & Leisure/ Starbucks

A news and convenience concept providing local and regional gift and souvenir assortment. Also includes a Starbucks coffee component.

Publications MSRP


$1.99 - $24.99

Beverages

$2.29 - $5.99

Candy $1.29 - $6.99

Snacks $1.89 - $12.99


$3.99 - $59.99

Electronics & Electronic Accessories

$7.99 - $129.99

Espresso $2.00 - $5.95

Add-ons and Substitutions

$0.59 - $0.70

Nitro Cold Brew $4.35 - $5.25

Coffee & More

$2.15 - $5.25

Teavana Tea $2.35 - $4.90

Smoothies

$4.85

Frappuccino $3.95 - $5.95

Starbucks Refreshers $3.60 - $5.25

Bottles Beverages $2.39 - $4.19

Orlando Weekly A news and gift resource for passengers incorporating technology, interactive displays and self-checkouts.

Publications MSRP


$1.99 - $24.99

Beverages

$2.29 - $5.99

Candy $1.29 - $6.99


Snacks $1.89 - $12.99


$3.99 - $59.99

Electronics & Electronic Accessories

$7.99 - $129.99

The renderings submitted by Stellar appear to suggest a greater offering of food items as opposed to news, gifts and sundries. Concession Improvements. Steller proposes an initial investment in Improvements of $2,846,750.00, which exceeds the minimum per square foot investment required.

Financial Return to the Aviation Authority. Stellar proposes to pay the Aviation Authority 23% percent of Gross Receipts.

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GREATER ORLANDO AVIATION AUTHORITY

MEMORANDUM

TO: Concessions Procurement Committee

FROM: Vaughan Henderson, Revenue Control Supervisor

DATE: November 8, 2018

Orlando International Airport One Jeff Fuqua Boulevard

Orlando, Florida 32827 -4399 (407) 825-3558

SUBJECT: Analysis of financial infonnation for STC Retail Package 2 Concession

The Finance staff was asked to analyze the financial infonnation provided by four (4) proposers in their response to the Request for Proposals for STC Retail Package 2 Concession.

The following analysis included areas of liquidity, profitability and long-term solvency. Dun and Bradstreet (D&B) reports on the proposers have been reviewed as well.

Financial Recommenclecl

Proposer Financial Statement Analysis Deposit

NewsLink of Orlando, LLC Audited - 2 years (12/31/ 17 & 12/31/ 16) Satisfacto1y (I) 50%

The Marshall Retail Group, LLC Audited - 2 years ( 12/31/17 & 01/01/17) Satisfactory (2) 50%

HG Orlando Retailers 2018 JV Audited-2 years (12/31/17 & 12/31/16) Satisfactory (3) 50%

Stellar DML GCG MCO, LLC Audited- 2 years (12/31/17 & 12/25/16) Satisfactory ( 4) 50%

The following items were noted during the financial analysis review:

(I) The financial statements were provided by NewsLink Group, LLC (the guarantor), 70% owner of thejoint venh1re (NewsLink of Orlando, LLC).

(2) The financial statements were provided by MRG Holdings Corp. and its Subsidiaries. Obligations of theproposer, The Marshall Retail Group, LLC, will not be guaranteed by parent or affiliated companyunder the concession agreement.

(3) The financial statements were provided by Hudson Group (the guarantor), 70% owner of the jointventure (HG Orlando Retailers 2018 JV).

PAGE 1 OF 2

( 4) The fmancial statements were provided by Stellar Partners, Inc. (the guarantor), 63% owner of the joint

venture (Stellar DML GCG MCO, LLC). Stellar Partners, Inc. provided two sets of fmancial statements

for year 2016, one for period ended September 25, 2016 and a second for 13-week period ended

December 25, 2016, due to acquisition by Host International, Inc. For purposes of this review, the

Consolidated Statement of Income for period ended September 25, 2016 and December 25, 2016 were

combined to produce a complete 52 weeks of financial infonnation.

Detail analysis is on file with the recording secretary.

Concur:

Pam L'Heureux, Director of Finance

PAGE20F2

GREATER ORLANDO AVIATION AUTHORITY

Orlando International Airport 5850 B Cargo Road

Orlando, Florida 32827-4399

MEMORANDUM

To: Raymond D. Anderson, Esq., Senior Director Commercial Properties &

Concessions From: George I. Morning, Director, Small Business Development Department Date: December 5, 2018 Re: South Terminal Complex Retail Package 2 Concession at Orlando

International Airport The Small Business Development Department has reviewed the Retail Package 2 Concession Proposals for the STC submitted by:

1. Stellar DML GCG MCO, LLC 2. The Marshall Retail Group, LLC 3. HG Orlando Retailers 2018 JV 4. NewsLink of Orlando, LLC

The Department of Transportation's (DOT) Airport Concession Disadvantaged Business Enterprise (ACDBE) program is mandated by 49 U.S.C. 47107(e) and implemented by recipients of DOT Federal Financial Assistance. Airports that receive federal funding are subject to the ACDBE regulations under Title 49 Code of Federal Regulations Part 26 (49 CFR 26). The ACDBE program was originally enacted in 1987 and was amended in 2012. The Aviation Authority’s ACDBE goal for this concession opportunity is 30% ACDBE participation. All proposals met the 30% ACDBE goal requirement; all respondents submitted the required ACDBE documentation; and all respondents are eligible to participate. The following items were noted during the Small Business Development Department’s review:

2

1. Stellar DML GCG MCO, LLC proposes 30% ACDBE participation through a joint venture between Stellar Partners, Inc. (63%) and two ACDBE companies, Diamarx Management, LLC (18.5%) and Global Concessions Group, LLC (18.5%), and through a proposed sublease with Host LDL MCO FB, LLC, a joint venture partially owned by ACDBE company, Lago Dora, LLC, for the operation of the Starbucks located within Unit R. The 30% ACDBE participation proposed by Stellar is based upon the projected revenues attributable to the ACDBEs partners’ operations and the subconcession space, out of the total projected sales for all concepts under the concession package. The two ACDBE partners’ ownership interest in the Stellar JV is 37%.

2. The Marshall Retail Group, LLC proposes 30% ACDBE participation through a

sublease agreement between The Marshall Retail Group, LLC (70%) and ACDBE company, AirPancho's, LLC (30%). AirPancho's, LLC will sublease the coffee portion to operate a Nespresso Coffee Bar and Einstein Bagel Brothers & Caribou Coffee.

3. HG Orlando Retailers 2018 JV proposes 30% ACDBE participation through a joint venture agreement between HG Orlando Retailers 2018 JV (70%), and four ACDBE companies, Perez of Florida, Inc. (10%), Newburns Management Group, LLC (8%), Transglobal Concessions, LLC (8%) and GTLC Hospitality Group, LLC (4%). GTLC Hospitality Group, LLC is a new ACDBE to the Authority.

4. NewsLink of Orlando, LLC proposes 30% ACDBE participation with ACDBE, Canopy Hospitality Group, LLC. Canopy Hospitality Group, LLC is a new ACDBE firm to the Authority. This Operating Agreement is between NewsLink of Orlando, LLC (70%) and Canopy Hospitality Group, LLC (30%).

Should you have questions or require additional information, please feel free to contact me at x7133 or Somdat Jiawan at x3481. cc: Phillip N. Brown, Chief Executive Officer

SCHENKELSHULTZ � � � A R C H I T E C T U R E � � � GENERAL CONSULTANT TO THE GREATER ORLANDO AVIATION AUTHORITY

200 E. ROBINSON ST. SUITE 300 ORLANDO FLORIDA, 32801 PH: 407-872-3322 FAX: 407-872-3303 G:\2018\1820712 GOAA South Terminal Oversight and Tech Services\Concessions\STC P1 ADVERTISEMENTS\Advertised STC P1 Retail Package 2\MEMO STC P1 Retail Package 2 RFP Review_SSA 102618.docx

MEMORANDUM

DATE: October 25, 2018

TO: Tracy Conner Harris, Manager of Concessions, GOAA

FROM: Andrea Rivero, SCHENKELSHULTZ A. Ernest Straughn AIA, SCHENKELSHULTZ

RE: SOUTH TERMINAL COMPLEX PHASE 1 RETAIL PACKAGE 2

ORLANDO INTERNATIONAL AIRPORT SCHENKELSHULTZ Project No.: 1820712

SCHENKELSHULTZ reviewed the referenced submittal package for design intent and conducted our review without reference to any financial or operational information contained therein. Only the information contained within the submittal package that was pertinent to the proposal’s design was considered. The following Proposal Submittals were received from GOAA and reviewed for design intent:

1. HG Orlando Retailers 2018 JV (Hudson Group) 2. NewsLink of Orlando, LLC 3. Stellar DML GCG MCO, LLC 4. The Marshall Group

General Design Review Comments:

1. Various design elements can be further refined through the Design Review Committee process that is required of all tenants prior to construction.

2. All proposals are based on the following locations and suggested Concept Type:

Unit Designation

Recommended Concept Type Location Level Square Feet

LS-A News & Sundries Landside Terminal Pre-Security 2 400 P Newsstand with Coffee Airside Terminal West Concourse 2 1,100 R Newsstand with

Coffee/Bakery Airside Terminal North Concourse 2 2,000 X News & Gifts Airside Terminal South Concourse 2 1,250

Total Square Feet 4,750 Design Review Comments:

PROPOSER COMMENTS

HG Orlando Retailers 2018 JV (Hudson Group)

Retail Concepts:

1. LS-A: Orlando The City’s Magazine: Use of light color wood and blue color accent speaks well to surrounding materials. Mostly open concept with light trellis roof feature addresses the desire for this space to be open to allow for views of the terminal. Could use additional interest through additional materials and/or graphics.



2. P: City Beautiful Market & Zaza: Large amount of back of house as well as full height product display provides less transparency and creates a more enclosed space than desired. Spacious area for circulation and passenger movement within the space. Overall proposed aesthetics appear to be in contrast to the contemporary nature of the terminal.

3. R: Hudson & Dunkin’ (FAO Schwarz Shop-in-Shop): Good use of

wood portal to work with the design guidelines. The use of neutral colors allows terminal finishes to transition seamlessly while using color in branding as an accent works well to define the brands. Some introduction of wood elements at counters does add warmth to the space. However, some additional variety of materials and natural finishes and color would be encouraged in lieu of relying on merchandise to enhance the interest factor.

4. X: Sundial Shoppe: Verification of entry toward holdroom is desired due to possible conflict of passenger seating. However, visibility into the store in that corner area is a positive element. The use of the wood portal with neutral elements while using branding as the accent color properly highlights the location while transitioning seamlessly with terminal finishes. This space provides good circulation within the space as well as a nice introduction of color for the interior of the space that is consistent with the storefront and branding.

NewsLink of Orlando, LLC

Retail Concepts:

1. LS-A: NewsLink: Very open design with a contemporary feel fits well into the context. The subtle use of color within the space adds to the interest. Two design concepts proposed with a slight difference in the location of proposed plants. Due to maintenance issues, placing planting material (whether live or artificial) would be preferred at the lower location.

2. P: Lineage News and Coffee: The proposed design shows an intricate trellis design that provides a unique feature to this space while allowing for full transparency throughout the concourse. The use of light wood works well with terminal finishes and provides warmth to the space. The layout allows customers to flow freely through the space without any queue outside of the area, which prevents any interference with passenger flow. Some use of accent color could be added for further interest.

3. R: NewsLink & Peet’s Coffee: A large variety of materials provides

a very busy space. Recommended refinement of materials to simplify the color palette inclusive of the reintroduction of the storefront wood portal.

4. X: Air Essentials: Verification of entry toward holdroom is desired due to possible conflict of passenger seating. Circulation within the space is organized and straightforward. Clean interior design could



use some color for additional interest. Exterior renderings were not provided; further comments on overall design intent could not be completed.

Stellar DML GCG MCO, LLC

Retail Concepts:

1. LS-A: Stellar News: Open design concept works well within the ticket hall of the terminal in order for views to be open throughout this space. The use of colored glass adds interest to the space while complementing terminal finishes.

2. P: Foxtail Coffee & News: Diverse material palette provides interest within the space while the neutrality of the materials transitions well into the concourse. The trellis element and lower counter/fixture elements allows views to remain open throughout the concourse. Small amount of seating provided also adds to the positive elements of this design.

3. R: Travel & Leisure News with Starbucks: The use of the wood

portal is in line with design standards. This design consists of a strong concept that remains complementary of terminal finishes. The space appears sophisticated and elegant while the use of wood throughout provides a desired warmth to the space.

5. X: Orlando Weekly: Verification of entry toward the holdroom is desired due to possible conflict of passenger seating. Interior use of lighting, color and graphics appears very busy. Would recommend simplifying to work with the introduction of warmer wood tones.

The Marshall Group

Retail Concepts: Statement of Orlando Experience

1. LS-A: The Scoop: This space is a more enclosed and darker concept with a fully enclosed ceiling system. This location would benefit from a more open design concept to allow passengers to have unobstructed views throughout the ticket hall. The interior circulation is clean and allows passengers to move in an organized manner within the space.

2. P: Replenish: The open trellis concept for this space responds well to the need for transparency in this location. Further unity within the trellis could be refined for a more cohesive design element that would be more impactful in this location. The use of color adds interest while working well with terminal finishes. There is good circulation of passenger traffic flow within their space. There appears to be a water fountain feature that while interesting, some concerns arise regarding containment of water as to not affect functions on ramp level below.

3. R: Main Streets Market (Einstein Bagels & Caribou Coffee): The

introduction of natural materials for warmth into the terminal is a very positive feature. Storefront, although latticed, adds further



enclosure to the space and further refinement would be encouraged to open the entry for maximum visibility.

4. X: City Arts Market: Verification of entry toward holdroom is desired due to possible conflict of passenger seating. Storefront design requires refinement for consistency with design guidelines. Good incorporation of base building wood portal. Interior elements creates an interesting space and incorporates concept of the art studio.

End of Review

MARCOS R. MARCHENA 976 LAKE BALDWIN LANE, SUITE 101 KEITH A. GRAHAM ORLANDO, FLORIDA 32814 YOVANNIE RODRIGUEZ TELEPHONE (407) 658-8566 CHRISTOPHER J. WILSON TELECOPIER (407) 281-8564 WRITER’S E-MAIL: [email protected] MEREDITH W. HAMMOCK JESSICA A. MAUGERI ANNE VAN DEN BERG SHANNON M. WIGGINS

MARCHENA AND GRAHAM, PA

TO: Raymond Anderson, Esq. FROM: Jessica Maugeri, Esq. DATE: November 30, 2018 RE: Legal Review of Litigation Disclosures for the STC Retail Package 2 Concession

MEMORANDUM

Counsel reviewed the litigation disclosures for each of the following Proposers:

• HG Orlando Retailers 2018 JV (HG Orlando) • The Marshall Retail Group, LLC (Marshall) • Newslink of Orlando, LLC (NewsLink) • Stellar DML GCG MCO, LLC (Stellar) HG Orlando Retailers 2018 JV

HG Orlando disclosed litigation as required. Upon review, legal counsel determined that the legal

disclosures were satisfactory. HG Orlando indicated that it was not the subject of any criminal

investigations.

The Marshall Retail Group, LLC

Marshall indicated that there was no litigation involving it or its affiliates to disclose. Upon

review, legal counsel determined that this was satisfactory. Marshall indicated that it was not the subject

of any criminal investigations.

Newslink of Orlando, LLC

NewsLink disclosed litigation as required. Upon review, it was determined that the litigation

disclosures were satisfactory. NewsLink indicated that it was not the subject of any criminal

investigations.

Marcos Marchena November 30, 2018 Page 2 of 3

Stellar DML GCG MCO, LLC

Stellar indicated that there was no applicable litigation filed by or against it, or its Affiliates, to

disclose. Stellar indicated that it was not the subject of any criminal investigations.

As Steller’s parent company, Host International, Inc. is an Affiliate of Stellar. Upon review, legal

counsel identified lawsuits involving Host International, Inc. that appeared to fall within the disclosure

requirements but were not disclosed. Legal counsel requested clarification from Steller as to any litigation

involving its Affiliate that was not disclosed in its proposal. Stellar responded by providing a list of

litigation involving Host International, Inc. that fell within the disclosure requirements. In Stellar’s

response, it stated that such litigation wasn’t initially disclosed because it believed its response to the

question 8.h. in the Eligibility and Proposal Form was sufficient. Upon review of the litigation provided,

legal counsel determined that the disclosure was satisfactory.

The clarification from Stellar included the following litigation involving Host International, Inc.

that fell within the disclosure requirements:

1. Ferguson Enterprises, Inc. vs. City of Los Angeles, et al.

Parties involved - Plaintiff, Ferguson Enterprises, Inc. Defendants include, among others, HMS HOST USA, INC. dba HMS HOST NORTH AMERICA, Westfield Concession Management LLC, Star Concessions Ltd., and Menemsha Development Group. Court in which case was litigated – Los Angeles County Superior Court Case number – YC069471; filed in 2013 Detailed summary of litigation – This action is multi-party litigation originally comprised of consolidated actions involving claims for damages and indemnity, bond claims and liens recorded with respect to multiple projects at the Tom Bradley International Terminal and Terminal 4 at Los Angeles. Outcome of litigation – The action involving the Host companies had settled as of August 2016.

2. JRC Development Group, LLC, et al. v. Jeff Levine, et al.

Parties involved - Plaintiffs, JRC Development Group, LLC ("JRC"), I-C Salads Everywhere, LLC, Anthony Marinucci and Fen Hanny Chan v. Defendants, HMS Host USA, Inc., HMS Host USA, LLC and Salad Creations t/a HMS Host USA, Inc.

Marcos Marchena November 30, 2018 Page 3 of 3

Court in which case was litigated – US District Court - Maryland Case number – 8:12cv3625; filed in 2011. Detailed summary of litigation – The parties entered into a contract for the operation of a salad franchise in Anne Arundel County, Maryland that gave the plaintiff salad companies exclusive rights to develop unit franchise agreements in the County. Plaintiffs allege that Defendants, including HMS host companies, breached this contract by entering into additional agreements with other companies in violation of their existing franchise agreement.

Outcome of litigation – The case was dismissed in 2012.

3. Advanced Consulting Service Inc. v. Host International Inc.

Parties involved - Plaintiff, Advanced Consulting Service Inc. (“ACS”), is owned by Chris Korge who is also a manager of proposer, HG Orlando. Defendant is Host International. Court in which case was litigated – Circuit County for Miami Dade County.

Case number – 11-24277 CA 08; filed in 2011.

Detailed summary of litigation –ACS sued Host International for breach of contract and for allegedly failing to pay fees owed to ACS pursuant to a consulting agreement between the two companies in connection with a 1998 concession opportunity at Miami Dade International Airport. Host retained Chris Korge, the owner of ACS, to assist Host bid on, negotiate and win a food and beverage concession contract in Miami International Airport. In exchange for ACS’ consulting services, Host would share a percentage of its cash flows with ACS for the length of the concession contract. The parties’ agreement was oral based on their understanding that ACS and Host would negotiate a written contract to be executed by the parties. Host won the contract and paid ACS based on the terms of their oral agreement while the two companies negotiated the terms of a written contract between 1998 and 2005. They parties never signed the written agreement and they disagree as to whether a final agreement was ever reached. Host stopped paying ACS prior to the expiration of the term of the concession agreement, which caused ACS to file suit against Host. On June 5, 2018, Host’s motion for summary judgment based on the Statute of Frauds was denied. This case is ongoing and does not involve Miami International Airport or the City of Miami. The only connection to the Airport is that the dispute arises from the parties’ agreement pertaining to an airport concession contract.

Outcome of litigation – The lawsuit was filed in Miami-Dade County in 2011 and is ongoing.

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