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12 September 2007
Running the city like a (family) business
The Chronicle's Carolyn Feibel reports that Council today is expected to consider a sweetheart airport concession extension for a politically connected contractor, instead of opening the bid process:
Mayor Bill White and the City Council are poised today to extend a lucrative airport food contract for at least eight years rather than go through a potentially messy competitive bid process.
The concession contract, which is scheduled to expire next June, has not been put out to bid since 1990. The original agreement has been amended three times.
"You're essentially making an evergreen contract here," City Controller Annise Parker said. "I'm also really surprised that an administration that really prides itself on its transparency has made a decision in the back room."
The deal would give JDDA Concession Management, owned by local businessman Jason Yoo, until the end of 2016 to manage the food courts in Terminal C at George Bush Intercontinental Airport, with an option for another two years after that.
Since 2003, Yoo has donated at least $28,000 to the campaigns of eight council members and $1,260 to White.
The city's awarding of food and beverage concessions for Bush and Hobby airports has led to public and politicized "food fights" in the past. The concessions are highly desirable; JDDA took in more than $46 million in revenue during the past three fiscal years, and turned over about $4.6 million of that to the city.
Controller Parker's criticism seems spot on.
Mayor White, who often preaches transparency (when he's not preaching about running the city like a business), seeks to deflect blame for this decision:
The mayor said he initially wanted to rebid the contract, but said he was approached by some council members on behalf of JDDA, which wanted the extension.
Sorry, Mayor White, but you control the agenda, and you have demonstrated a winning track record on your priorities (whether it's SAFEclear, red-light cameras, Houston MediaSource, or dumping Jordy Tollett). This notion that "Council made me do it" is unconvincing coming from one of the strongest mayors in recent Houston history.
Feibel does some good work in figuring out which Councilmembers pushed the Mayor in the direction of back-room dealing:
White declined to name the council members who had stepped forward on behalf of JDDA. But when asked, Councilmen Jarvis Johnson and Michael Berry said they had.
"They had, I guess, a slump in business," said Berry, who received a $5,000 contribution from Yoo in 2005. "And they didn't think it was fair that the contract was up as soon as it was."
JDDA purchased the contract from the previous vendor, Entertainment One Inc., in 2005, but the Sept. 11 terrorist attacks and renovations at Terminal C meant lower-than-expected revenues, according to JDDA's attorney, Robert Miller.
Johnson said the extension was the "right thing for the city to do," since food sales declined during the airport renovations.
"The new deal gives us what we need. It also gives the city more income," the councilman said. Johnson received a $2,000 contribution from Yoo this May. Yoo's daughter also worked briefly on Johnson's staff in early 2006. But Johnson and Berry denied any political favors or conflict of interest.
Councilman Ronald Green, who got $5,000 from Yoo in March, also supports the contract extension.
"I wanted us not to have a major food fight," Green said. Extending the contract allows "continuity" and brings in more money for the city, he said.
So, transparency and open competition should be tossed out -- and the contract extended until 2016 -- because there was a slump in the business and a political contributor thinks it's unfair that the contract he acquired has an expiration date?
That's a stunningly unconvincing (and condescending) assertion from Berry and his colleagues.
Matt Stiles further breaks down Yoo's political contributions here.
While we do not support the way this deal was constructed, we do understand why Mayor White is on board (despite his previous rhetoric about transparency):
The mayor agreed to negotiate an amended contract, but added conditions: JDDA had to bring in a partner with national experience in airport food management, boost the city's cut on food and beverage sales, and commit to spending $10.5 million for new food courts.
If the concession were publicly bid, the city probably could get only $7 million for renovations, airport officials said.
Mayor White has consistently worked to create new revenue streams or enhance existing revenue streams for the city during his tenure, so it seems in this instance that boosting a revenue stream trumped his previous rhetoric about transparency. And it's consistent with the theme of "running the city like a business" -- even if it's more like the family business.
Kudos go to Councilmember Anne Clutterbuck, who is a sane and compelling voice on this topic:
"We're elected to make the tough decisions," she said. "I don't think we should shy away from the controversial issues because it might not be something we're interested in working on."
"We need to open it up," added Clutterbuck, who received $1,000 from Yoo in 2006.
We concur.
UPDATE: Councilmember Clutterbuck tagged the item today, saying the process should be opened to competition. Mayor White sounds determined to move forward with the sweetheart extension, however. The tag will postpone consideration of the item until next week.
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Posted by Kevin Whited @ 09/12/07 09:48 AM | Houston Politics | Technorati | Comments (11)
17 September 2007
Mayor responds to airport concession criticism with press release
Last week, Councilmember Anne Clutterbuck put a tag on Mayor White's proposed sweetheart contract extension for the underperforming (but politically connected) concessionaire at Bush Intercontinental Airport's Terminal C.
Since then, Mayor White (who has trumpeted his administration's transparency) has come under fire in various quarters for refusing to open a bidding process to find a new vendor and upgrade Terminal C's inadequate concessions.
Today, Mayor White's press machine tried to counter some of the criticism. The Chronicle's Matt Stiles posts the press release he received from Patrick Trahan:
Food service at Terminal C provided by a contract inherited by my Administration is worse than at competing airports.
I have proposed to council that we negotiate an extension because our position with the vendor puts us in a unique position to leverage value for the city. Secondly, it is in the best interest of the city to move forward with this proposed agreement that would allow for expedited conversion of Terminal C, without a protracted battle over contracts.
The City of Houston's professional airport managers and I announced publicly last spring our intention to replace the current food contractor when the contract expires next summer, unless there were big changes in management and millions more invested in upgrades. Council Members were updated along the way and had input. The process was transparent. The contractor complied with tough demands. Aviation professionals tell us the City obtained the benefit of competition before the current inadequate contract expires.
Hard-nosed managers in the private and public sectors often tell vendors they must immediately offer better contract terms or face replacement later on. By removing contract extension as a tool for City negotiations, we would lose an effective tool for improving existing contracts.
This Administration does not mix contracts with politics and does not fear fights. I believe the public wants city officials to pay more attention to constituent service and improving public safety, traffic, and neighborhoods, rather than on fights between vendors.
Council spent almost a year debating the vendor for scheduled airport shuttle service, and for months much service was lost after a contract expired, without replacement.
That is a BIZARRE press release that is not convincing.
First, I don't think I would have concluded a press statement trumpeting the White Administration's transparency by... citing an earlier airport-related sweetheart deal that benefited one bigtime political contributor (Yellow Cab) and effectively put an existing airport shuttle operation out of business. That example isn't really consistent with the message (as the expensive political consultants might say).
Second, calling a non-transparent process transparent doesn't make it so. The Mayor may not like the criticism of this sweetheart extension, but he's getting criticism because he claims to govern transparently, yet has promulgated a sweetheart contract extension for an underperforming vendor who just happens to be politically connected. Even Mrs. White admitted that this doesn't pass the smell test.
Third, the whining in the first paragraph about inheriting this underperforming vendor from a previous administration is just odd, since the lengthy contract extension being proposed by Mayor White would only saddle future administration(s) with the underperforming vendor. Why is saddling the next mayor(s) with an underperforming vendor preferable to a competitive bid process?
Fourth, the notion that the public wants the Mayor and Council to avoid a protracted fight on this matter is curious. Surely Mayor White does not really mean to suggest that his administration is incapable of pulling off a basic function of government (structuring a bid for services and going through a fair process that secures the best deal for taxpayers). That is not a reassuring signal from a big-city mayor with aspirations for higher political office. It's hard to imagine such an admission (implicit or explicit) coming from Mayors Bloomberg or Daley.
Or even from Albuquerque's Mayor!
In fact, we've heard quite a bit about Houston's lax residency requirements of late. If Mayor White doesn't feel like he's capable of conducting a fair bid process for IAH Terminal C concessions and forging political consensus on Council for such a move, perhaps we could run Albuquerque's mayor in the next election?
ANNE ADDS: Here's the first paragraph of Carolyn Feibel's story in today's Chronicle:
Mayor Bill White called the food service at Bush Intercontinental Airport's Terminal C inferior to that of other airports and said the fastest way to improve it was to extend the contract of the company that dishes it out.
That's just insane. This is not how good government operates, and taxpayers should demand better. Also in Feibel's story, Councilwoman Anne Clutterbuck asks:
"I think it's a terrible precedent," Clutterbuck said. "The way it is now, it begs the question of why do we bid any contract? To what other contracts will this process be applied?"
Indeed, but maybe we already do have a precedent: Will all airport contracts be set aside for City Hall's political friends? We certainly seem to see a pattern.
And Councilwoman Clutterbuck's greater point is extremely important as related to government: What other city vendors will now come forward and demand the same preferential treatment Jason Yoo gets -- provide a lousy service, give plenty of political donations, and land a sweetheart deal?
Posted by Kevin Whited @ 09/17/07 09:44 PM | Houston Miscellany | Technorati | Comments (12)
05 August 2008
Shay: City's pols really really like Jason Yoo
Miya Shay's latest editorial for the West University Examiner provides some interesting insight into the city's network of movers and shakers:
On a steamy Thursday evening, half a dozen former, current and future elected officials were among a hundred or so people gathered in the Museum of Fine Arts. No, they weren’t looking at the latest postmodern exhibition. Rather, everyone showed up to honor Diane Yoo, the newly crowned Miss Asia USA.
Now, we all know politicians never celebrate random beauty queens. Miss Yoo is stunning, to be sure, but she just happens to be the daughter of Jason Yoo, the man holding a very lucrative contract for airport concessions at Bush Intercontinental.
He’s also a very prolific political donor, writing checks ranging from $250-5,000 to many on City Council. As a result, they like him — really, really like him.
There was former Mayor Lee Brown gushing with praise; City Council members Toni Lawrence, Jarvis Johnson and Jolanda Jones all clapping at the appropriate times. Even former Council Member Gordon Quan showed up for support.
The pretty Miss Yoo also worked under Quan and Johnson, but she now works for her dad and has become a pretty prolific political donor herself (these things run in the family.)
I’m not going to spend a whole column talking about campaign donations, as currying favor with money is nothing new in the political arena, and the Yoos are simply following the footsteps of so many before them.
True enough, but we rarely see this sort of interesting background reporting when, say, Mayor White is bending over backwards to reward Jason Yoo for substandard performance as the concessionaire in Terminal C (which is more of a dump than one would expect from the main terminal of the hometown airline).
Posted by Kevin Whited @ Jason Yoo"> 08/05/08 11:10 PM | Houston Miscellany | Technorati | Comments (3)
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