US. The Chicago City Council Committee on Aviation yesterday approved an ordinance that will allow the City to enter into a concession redevelopment and management lease agreement with Westfield Concessions Management at Chicago O’Hare Terminal 5 (International Terminal).
Having gained the Committee’s approval, the ordinance will be voted on by the full City Council at the next meeting on 28 July.
The agreement provides for a complete redevelopment of the concessions program in International Terminal 5 at O’Hare International Airport. Dufry (replacing incumbent Duty Free Americas), Hudson Group and Ãreas are set to run the duty free, news & gifts and food & beverage operations, respectively, The Moodie Report understands.
The agreement, if ratified, is a double coup for Dufry, which also owns Hudson. Powerful Spanish food & beverage operator Ãreas will be similarly delighted.
“Westfield’s proposal for the redevelopment of the Terminal 5 Concessions Program is the best deal for the city’s taxpayers,” said Mayor Rahm Emanuel. “Their proposal to invest more than US$26 million in capital improvements for the redevelopment of the Terminal 5 Concessions Program while creating 280 new jobs to Chicago will benefit international travellers and residents alike.”
Westfield, the successful respondent, was unanimously selected by a 20-member evaluation committee, after what the department called a thorough 16-month request-for-proposal process.
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“Westfield’s proposal for the redevelopment of the Terminal 5 Concessions Program is the best deal for the city’s taxpayers“ |
Mayor Rahm Emanuel |
The 20-year agreement calls for Westfield to redevelop and manage concessions in International Terminal 5. It does not privatise the terminal itself. The City retains full ownership of the terminal and has the opportunity to terminate the agreement at the ten-year mark, for any reason.
“The agreement provides an excellent opportunity for the CDA to redevelop Terminal 5 and contract with a recognised, proven industry leader to accomplish the necessary goals in making Terminal 5 a crown jewel for O’Hare International Airport and the city,” said Commissioner Rosemarie S. Andolino.
“We have come to this recommendation as a result of an incredibly competitive, thorough and transparent process.”
Westfield and its chosen operators will invest US$26.2 million to redevelop the terminal’s concession programme. This will include the relocation of the security checkpoints and the build-out of several new concession spaces within the airside location (post-security) of the terminal.
In addition Westfield will pay the city annual rent relative to revenue generated at T5 each year. The annual rent to be paid by Westfield will be either US$3.00 per actual international enplanement from T5 in the prior calendar year or a percentage rent of 16% of gross sales, whichever is greater. The US$3.00 per enplanement will be tied to the Consumer Price Index to account for inflation.
Westfield Concessions Management LLC is 100% owned by Westfield Concession Management LLC (WLLC). In turn, WLLC is wholly owned by Westfield America Limited Partnership which is 100% owned by the Westfield Group.
The Westfield Group is one of the largest retail property groups in the world. Westfield is known for its portfolio of shopping centres including Chicago Ridge, Old Orchard, Skokie, Fox Valley, Aurora, Hawthorn, Vernon Hills and Louis, Joliet.
Westfield Concessions Management holds leases or management contracts at the following airports: Boston Logan, Orlando, Houston (George Bush), JFK, Miami, Newark Liberty, Ronald Regan National and Washington Dulles International Airports.
O’Hare’s International T5 was built in 1993. Currently 23 air carriers operate from the terminal’s 21 common-use gates. O’Hare consistently ranks as one of the world’s busiest airports, offering non-stop and direct service to nearly 200 cities worldwide.
Fifty-five commercial carriers operate out of 189 gates at O’Hare, carrying more than 67 million passengers annually. O’Hare ranked 53rd in the world in international traffic numbers in 2010, with 10,371,419 passengers recorded, according to Airports Council International.
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