Airport Experience® News - ACDBE & Small Business Issue 2024

Observers See Upside Crews, Aranza, Pastorelle and Plummer aren’t the only industry insiders who see benefits to such combinations. Michael Freilich spent 17 years with the Federal Aviation Administration (FAA) before retiring in 2019 and starting Michael Freilich Consulting . He’s overseen many of the ACDBE program’s guidance changes over the years and maintains interest in how it performs going forward. He hasn’t seen a lot of projects where ACDBE operators joined together on bids. And he sees some risks. Obtaining capital likely would be more challenging and having more skin in-the-game comes with increased risk – and that will be taken on without the deeper pockets, broader resources and institutional knowledge that comes with partnerships with primes. That said, Freilich says such partnerships might give the smaller entities more control over business approach, closer relationships with the airport and a bigger piece of the pie. And, Freilich says, it’s definitely in line with the goals of the program. “I think there could be some advantages to this approach,” Freilich says. “This higher level of independence approach fits within one of the core underlying objectives of the program, to serve as an incubator to assist in the development of firms that can compete successfully in the marketplace outside the ACDBE program.” Alan Gluck, senior manager of aviation for ICF, agrees. He says there are several ACDBE operators in the industry capable of leading a partnership and agrees that in creating such partnerships, the participants would be learning as they grow in keeping with the standards established when the ACDBE program was established. They wouldn’t necessarily be able to compete on every project – which makes it somewhat incumbent upon airports to create bids with smaller packages for smaller businesses – but they are good operators with the potential to do more than they sometimes can when partnered with the legacy primes.

“They’re not necessarily ready to take on the largest of the large,” he says. “I’d like to see more ACDBEs bidding.” Gluck says such combinations also help eliminate faux partnerships where larger companies find small businesses to bid with in name only but the ACDBE partners don’t do anything or they are performing professional services, such as legal work or marketing but not participating in the day-to-day operations. “The purpose of the ACDBE program was to get store owners involved who had never had the chance, not to get lawyers or downtown connected people,” Gluck notes. Plummer’s Future In the meantime, while access to capital and development costs remain barriers, Plummer also acknowledges it will make it easier for future ACDBE tandems to bid successfully if airports see success stories. He wants to expand Concord Collective, both at LAX and beyond, but he also recognizes the eyes of the industry are upon him. That’s why he works doubly hard to ensure the company is successful in its current undertaking. He’s had challenges that he’s still working through there, but overall it’s going well. He’s proud to be where he’s at and excited for what comes next. “We’re driving the ship. Everything that happens in this company, good or bad or great, stems from this ownership group,” he says. “We take that very seriously. We know the responsibility we have, not just to ourselves, but to the industry. If we fail, it has a much more sweeping impact on the industry.” We know the responsibility we have, not just to ourselves, but to the industry. If we fail, it has a much more sweeping impact on the industry.” – Greg Plummer, managing partner, Concord Collective

suggesting that many were less out for mentoring and showing minority business owners the ropes than they were for finding partners with political connections and making sure they could check the boxes required for participating at airports. “That’s how the big boys operate,” says Aranza, who was in a unique position to compete on his own early in the concessions industry’s evolution, as he’d met representatives from companies like PepsiCo. and Brinker International through his law practice that allowed him to pitch brands like Pizza Hut and Chili’s just as such national operators were gaining steam. “I had access to a whole bunch of restaurants through being a lawyer,” he says. Nowadays, he owns 14 locations himself and he continues to participate as a joint venture partner in several more. But through the years, as he has become larger and more experienced, he says he has on a number of occasions teamed with other ACDBE operators to provide the mentorship he feels is missing from the program’s typical joint ventures. “I think there are a lot of deficiencies in how that relationship is set up and monitored so that the ACDBEs actually learn,” he says. “I hear a ton of complaints from ACDBEs about their relationship with primes across the board.” He has worked with other ACDBE partners on deals where he has bid as a prime. But before he does so, he wants to make sure they’re in it for the right reasons. “I put them into my deals,” he says, adding that he’ll help them get in touch with financing sources. “But I know they’re going to learn. If they don’t want to be an operator, if they are just looking for a check in the mail, I don’t have time for that. If they want to get into the business, want to run their own business, I will do everything I can to help them.”

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AX NEWS JULY/AUGUST 2024