June 12, 2008

City Council approves airport concessions

Travelers at Mineta San Jose International Airport (SJC) will be able to enjoy unique local stores and restaurants at Silicon Valley's new airport after the San Jose City Council gave a green light for new concessions at Tuesday’s meeting.

The council approved staff recommendations to award food, beverage and retail concession packages to Host International, Areas USA and AMS-SJC after an extensive effort by the airport to seek and evaluate proposals that would meet growing passenger expectations for quality airport services with a clear local character.

"This is excellent mix of local, regional, national, and international businesses that will serve our customers, the airport and our business community very well," said SJC Aviation Director Bill Sherry.

"We're excited about our new partnerships that will help us make this airport a proud gateway that truly represents the people and the flavor of San Jose and Silicon Valley."

Among the 23 local restaurants and shops that will join the airport mix over the next two years are Hicklebee's Children's Books in Willow Glen; Schurra's Candies, a San Jose company since 1912; Paolo's Restaurant in downtown San Jose since 1958; Sunnyvale's CJ Olson Cherries; Sonoma Chicken Coop; and Chiaramonte's Deli, San Jose's oldest Italian deli dating back to 1908.

The new concessions will occupy both existing and expanded space at SJC as a result of the comprehensive construction program to modernize the airport that is scheduled for completion in 2010.

As a result of the airport's complete overhaul, there will be about 43,000 square feet of space for retail and food and beverage concessions, with that space expected to increase with future development of the airport. This compares to current space of about 23,000 square feet.

The combination of the concession proposals will provide at least $8.2 million of guaranteed minimum annual revenue to the airport and an estimated annual sales tax of $564,000 to the city's General Fund once the new concessions program is fully operational in 2010-2011. Over the 12-year period to be covered by the new agreements, the airport estimates that total sales from the new concessions will be more than $600 million.

SJC developed the comprehensive request for proposals after broad outreach to both local businesses and national operators to solicit interest in participating in the greater opportunities available when San Jose completes its $1.3 billion replacement and renovation of terminal facilities.

The overall project includes the construction of a new Terminal B that will take the place of Terminal C, originally built in 1965; upgrades and expansion of Terminal A to provide more spacious and comfortable waiting areas and faster security check-in systems; a new 3,350-space rental car and public parking garage directly in front of the terminals; expanded space for more options for food, beverage, and retail services; and improved roadways serving the airport.

With approval by the San Jose Council, the SJC director of aviation will enter into negotiations with those proposing to develop concession agreements this summer and adjust locations and concepts in order to serve customers better. Although this preliminary list of businesses is subject to some change, the majority of concepts within the proposal packages will remain intact. Each package contains locations in both Terminal A and the new Terminal B.