Mall magnate Rick Caruso has withdrawn from the bidding for a concessions contract at Los Angeles International Airport, citing delays and constraints imposed by airport staff.
Matt Middlebrook, Caruso's senior vice president, said the bidding process has become “too cumbersome and too long.” He said the delays were “emblematic of part of the problem with the city of L.A. and its atmosphere toward business.”
“I think you'd have a hard time finding anybody who would stand up and say L.A. is a business friendly town,” Middlebrook said.
Caruso is mulling a run for mayor in 2013. Some have raised concerns over whether Caruso's bid for the concessions management contract at Tom Bradley International Airport would pose a conflict of interest if he decides to run.
Middlebrook said the two decisions are unrelated.
“Both opportunities have always existed,” he said. “One has never affected the other in terms of consideration.”
Middlebrook said Caruso was approached more than a year ago and encouraged to participate in the bidding process for a new terminal manager. The contract would involve bringing in new shops and restaurants to spruce up the aging international terminal.
Caruso spent $1 million pursuing the deal, but as the process dragged on it became a less attractive opportunity, Middlebrook said.
“We decided to get out of it,” Middlebrook said. “It had the opportunity to be a great knockout project inside the terminal. We think it's shaping up to be a mish-mash.”
Specifically, Middlebrook cited the airport's unwillingness to give the contractor control over duty-free shops and advertising, two revenue streams that would have made the deal more attractive.
Middlebrook also said the bidding process will end up being a year behind schedule, giving the contractor limited time to put the new stores in place.
Michael Molina, deputy executive director for external affairs at Los Angeles World Airports, said that the airport was being deliberate on purpose.
“We took our time to do it right,” Molina said. “This style of concessions management is new to LAWA, and it was important to us to thoroughly prepare before the solicitation began.”
Molina also said the duty-free shops and the advertising were never expected to be included in the contract. He added that the request for bids will be issued next week.