Airport Experience® News - ACDBE & Small Business Issue 2024

“It has been wonderful to work with a group I have respected for so long,” she says. “We have known each other for more than 20 years dating back to when I worked for the landlord and they were operating their first airport location. I think one of the reasons this partnership works is that we have clear roles.” MRDG runs the day-to-day operations and Pastorelle works with the brand and on special initiatives. “I think as with any partnership, it could be harder if you are working side by side on a daily basis, but I’m sure there are also people who could make that work, as well,” she adds. Pastorelle thinks ACDBEs who need investors should look at potential partnerships with other ACDBEs, some of whom may be accumulating resources that would allow them to invest due to lack of new opportunities in their local airports. She advises potential partners to make sure they have a detailed operating agreement to govern disagreements or potential partner exits. “Fellow ACDBEs know the business better than anyone and so could make a great investment partner,” she says. “I would encourage those who are looking at a deal they may have trouble financing to look to other ACDBEs.” Operator Support Nick Crews, CEO and managing partner of Crews Cos. , hasn’t had many opportunities to partner with other ACDBEs to this point, but his company did partner with LaTrelle’s Management a few years ago on an RFP issued by William P. Hobby Airport (HOU). The bid was eventually thrown out and the timing didn’t work out for Crews to participate in the re-bid. As a result, LaTrelle’s ended up bidding alone and winning a $334 million contract at HOU. “This is proof that given the access to compete on equal footing, small companies can execute large responsibilities,” said LaTrelle’s CFO Kenneth James in a statement at the time. Crews says his company also bid with another minority partner at Seattle Tacoma International Airport (SEA) but ended up selling its interest in that project as the company won other space and needed to ensure its finances remained stable.

Left: Nick Crews, managing partner of Crews, bid at HOU in tandem with LaTrelle’s Management a few years back. The bidding was ultimately thrown out, but Crews supports the idea of ACDBE partnerships going forward.

Capital remains a significant barrier for ACDBE companies who want to bid on larger projects together. “It’s the financing of the project - access to capital - which continues across the industry,” Crews says, adding that airports judge proposals, in part, on balance sheets. “ACDBE’s [balance sheets] don’t compare to large primes or mid-sized companies,” he says. “Your scoring is going to be lower in trying to win that bid.” That said, he supports the effort. He’s excited for Plummer and Concord Collective and its efforts at LAX and he hopes airports will continue to find creative ways to structure bids that minimize minimum annual guarantees and give small companies the opportunity to bid. “We’re a unique ACDBE. We’re an ACDBE prime that has a longer history than most other in the business and a significant size that can allow for some creativity,” Crews says, adding that the cost of bidding is another factor forcing small companies to be selective in pursuing such opportunities. “We absolutely would go after opportunities with another ACDBE.

We’ll be very selective with what that opportunity is and have to feel confident that we have a good shot of winning.” Aranza Assists ACDBEs While deals run by ACDBE partners are still exceedingly rare in the big picture of airport RFPs, they’re not unheard of. Gilbert Aranza, president and CEO of Star Concessions , was among the first to create such partnerships. Aranza has owned streetside restaurants since 1983. He got back into restaurants after experiencing persistent discrimination during his tenure with the first law firm he worked at out of Harvard Law School. He had put himself through school working at restaurants, and learning every aspect of the business along the way, he says. Aranza got into concessions a few years later, first at Dallas Love Field (DAL) and then at Dallas-Fort Worth International Airport (DFW) , when both airports put their programs up for bid. While he loved the industry, he grew disillusioned over the years with partnering with primes,

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AX NEWS JULY/AUGUST 2024