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.
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.