07-08-97777
Board of Directors Room
City Hall - 500 W. Markham
Little Rock, Arkansas
July 8, 1997 - 4:40 P.M.
The Board of Directors of the City of Little Rock, Arkansas, reconvened from the
July 1, 1997 regular meeting with Mayor Jim Dailey presiding. City Clerk Robbie
Hancock called the roll with the following Directors in attendance: Directors Wilson,
Hinton, Hodges, Cazort, Keck, Wyrick, Kumpuris, Kelly, and Adcock - total 9; Absent -
Director Joyce - total 1.
With a quorum being present, Mayor Dailey declared the Board of Directors in
session and stated the purpose of the reconvened meeting was to hear presentations
from the Airport Commission and bidders regarding the concessions contract at the
Little Rock National Airport, and to make appointments to various Boards and
Commissions. (Note: Item 1 on the Agenda was an Ordinance vacating and closing a
portion of Cedar Street between West 30th and West 31st Streets. However, Mr. Bob
Stewart, President of Pro Window & Door, Inc. had filed a written request to withdraw
the Ordinance due to other arrangements. Therefore, the Ordinance was withdrawn
from the Agenda.)
Mayor Dailey requested a briefing by City Attorney Tom Carpenter. Mr.
Carpenter stated that the purpose of hearing the presentation by the Airport
Commission was to determine if the process used in awarding the concessions
contract was thorough and fair. It is not a question of who gets the contract. The Board
of Directors does not have that authority. The Airport Commission has recommended
that the contract be given to Host - Marriott as a joint venture with Platinum Management,
Inc. Mr. Carpenter referred to his Memorandum dated July 7, 1997, to Mayor Dailey and
the Board of Directors, in which he suggested the appropriate scope of any Board inquiry
about the contract.
(Director Joyce enrolled at 4:50 o'clock P.M.)
Mr. Taylor Brown, Chairman of the Little Rock Municipal Airport Commission,
read a prepared statement in which he explained that the Airport Commission
Lease /Consultant Selection Committee, chaired by Mr. Gene Fortson, after many hours
of deliberation and extensive effort to investigate the viability of the proposals received in
response to the Request for Proposals, recommended the Host Marriott/Platinum
Management Joint Venture be chosen for the food, beverage and merchandise
concessions at the airport. The vote was four (4) to zero (0) with Commissioner
Shackelford absent.
Mr. Eugene Fortson, Chairman of the Leasing Committee of the Airport
Commission, then read a five (5) page prepared statement in which he outlined the goals
of the Leasing Committee: (1) to significantly increase the variety and scope of
concession services offered at the Little Rock Airport; (2) to mandate that the prices
charged the traveling public be no more than 10% above a market basket average of
"street prices" for similar products and services; and (3) to increase sales and thereby
increase the Airport's revenue over the ten years of the concession contract; and explained
in detail how the selection was made. He also responded to statements made by Mr.
Gilbert Aranza, one of the unsuccessful applicants, in implying that the Airport
Commission engaged in improper conduct in the selection of Host Marriott as the food,
beverage and retail concessionaire at the airport.
Mr. Gary Smith, Airport Commissioner and a member of the Leasing
Committee, also read a seven (7) page prepared statement in which he discussed the
process he went through in order to arrive at his decision.
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July 8, 1997
Mrs. Deborah Ledwell, Manager of the Little Rock National Airport, responded
to questions by Director Hodges regarding a letter she had written on May 30, 1997
expressing concern about the level of service by Host/Platinum. In response to a question
by Director Adcock, Mrs. Ledwell said that Host Marriott purchased the concessions
lease in 1992 from Dobbs, which was a thirty (30) year lease expiring in December, 1997.
Airport officials were not involved in that transaction.
(Director Wilson was excused at 6:40 o'clock P.M.)
The Airport Commission and Mrs. Ledwell responded to questions by members
of the Board of Directors. Following the lengthy discussion, Mayor Dailey declared a ten
minute recess at 6:45 o'clock P.M. before hearing from the bidders.
The Board of Directors reconvened at 7:00 o'clock P.M. with Mayor Dailey
presiding and nine (9) Directors present. (Director Wilson was absent.)
The first speaker was Attorney Dick Downing, representing Mr. Gilbert Aranza.
Mr. Downing pointed out the "inherent unfairness of what has been presented." He asked
Mr. Chris Louden, Senior Vice President of Texas Commerce Bank, to make a statement.
Mr. Louden said he is the bank officer for Mr. Aranza and that Mr. Fortson called the
Bank President for a reference on Mr. Aranza but did not talk to Mr. Louden.
Mr. Gilbert Aranza of Little Rock Concessions Ltd./Hudson News Joint Venture
and also Arkansas Concessions, Ltd./Multi- Restaurants Group, then addressed the Board
of Directors. He stated that the Airport Commissioners have not been thorough, and
asked the Board to look at the inconsistencies. Mr. Aranza responded to questions by the
Board of Directors.
Mr. Joe Bell, an attorney with the Friday Law Firm, representing Hudson News,
said Hudson News was disappointed that it did not get the bid, but believed the Airport
Commission should be allowed to go foward with Host Marriott.
Mr. Carlton McCrary, who owns RiverRock Brewery, said that Mr. Aranza had
talked to him about providing a microbrewery service at the Airport, but Host officials
did not and he wanted to know why Host would not meet with him.
Mr. Steve Izant, Vice President for Business Development for Host Marriott, and
State Senator Bill Walker, Platinum Management, responded to questions by the Board
of Directors. Host has 70% equity in the joint venture and Platinum has 30% equity.
Host Marriott Services is the parent company of Host International and Host International
has 93% of Host Marriott assets.
At the conclusion of the four hour presentation and discussion, Director Hodges
said he still was not satisfied. He felt that customer service at the Airport is the number
one issue. The key issue is has the Board of Directors lost confidence in what the Airport
Commission has done. Mayor Dailey had no problem with the Airport Commission's
choice and felt the Board should continue to allow the Airport Commission to move
forward in negotiating with Host Marriott/Platinum, but instructed City Attorney
Tom Carpenter to stay part of the process. No official action was taken by the Board of
Directors.
The Board deferred making appointments and reappointments to various
Boards and Commissions until Tuesday, July 15, 1997.
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Minutes
July 8, 1997
There being no further business to be presented, the reconvened meeting was
adjourned at 8:50 o'clock P.M. with the Board of Directors to meet again in regular
session on Tuesday, July 15, 1997 at 6:00 o'clock P.M.
ATTEST:
Q "44�1 A42-t4tnE.
City Clerk Robbie Hancock
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APPROVED:
JoIr Jim Dailey
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