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The Union obtained updated federal guidelines to ensure that funds earmarked for small concessionaires at 6 airports benefit small businesses, not large businesses
LOS ANGELES & PHOENIX – (BUSINESS WIRE) – UNIE HERE Local 11 sent a letter to the Federal Aviation Administration on October 22, 2021 calling on the agency to ensure that federal pandemic relief funds are appropriately distributed at the six airports in the southwest where Local 11 represents concession workers. On November 24, 2021, the FAA issued updated guidance and subsequently responded to Local 11, clarifying ways to ensure that ARPA Airport Rescue Grant money is channeled fairly to dealers in its jurisdiction. Complete guide available here.
UNITE HERE Local 11 represents airport concession workers at Los Angeles International Airport (LAX), Phoenix Sky Harbor Airport (PHX), John Wayne Airport (SNA), Los Angeles International Airport (SNA), ‘Ontario (ONT), Long Beach Airport (LGB) and Tucson Airport (TUS). In total, the union represents more than 32,000 hospitality workers in Southern California and Arizona.
The original letter from the local highlighted Host International, Inc., the largest dealership in North America. HMS Host is owned by Italian billionaires through holding company Edizione, which had a net asset value of $ 12.5 billion in 2020.
In addition to sending the letter to the FAA, the local met with Congressman Greg Stanton, who sits on the Congressional Transportation Committee, to whom workers at HMS Host have raised concerns. They were concerned that if the issue was not resolved, large companies like HMS Host would have been classified by some airport sponsors as a qualifying small airport concession, giving large airport concessions access to the allocation funds of $ 640 million. dollars to small dealers.
The FAA responded and closed the loophole that could have allowed large dealers such as HMS Host to be categorized differently. The updated FAA guidelines state that “a concession that operates locations at multiple airports should use the entity’s total gross revenue rather than the gross revenue for an individual location. ”1 This means that national players like Host cannot simply benchmark the gross revenues at a particular airport. .
Additionally, the FAA has been firm that an airport sponsor should categorize airport concessions based on the contractual relationship in place as of March 11, 2021, which is the date ARPA was enacted. The updated FAA guidelines state that, “While there is no prohibition against changing the contractual relationship between an airport and its concessions, changes made after promulgation should not be for the purpose of reclassifying an airport. concession as a large or small airport concession (eg transfer from a sub-concession contract with an owner / developer to a direct concession contract with the airport developer). “2
The local’s October letter cited our observations at two airports, including Clinton National Airport, where the Little Rock Municipal Airport Commission voted at its August 17, 2021 meeting to reassign the contract. concession of food and beverages from Host International to a pre-existing legal entity, Host JQE. RSI LIT FB, LLC. 3 This joint venture includes Host International (70% ownership), JQE Enterprises (15% ownership) and RSI Group, LLC (15% ownership). In the absence of these updated FAA guidelines, Local 11 argued that this host-controlled joint venture could have been classified as a small airport concession for grant award purposes.
UNITE HERE Local 11 is a union representing more than 32,000 southern California and Arizona hospitality workers who work in hotels, restaurants, universities, convention centers and airports.
1 Please refer to Q-CR3. Guide available here: https://www.faa.gov/airports/airport_rescue_grants/media/20211124_ARPA_FAQs.pdf
2 Please refer to Q-CR26. Guide available here: https://www.faa.gov/airports/airport_rescue_grants/media/20211124_ARPA_FAQs.pdf
3 (pdf p. 4) https://drive.google.com/file/d/1ZkpLjcUC9l3CpxQKxIgfBzHYpc11wHUd/view?usp=sharing; (pdf page 223) https://www.autogrill.com/sites/autogrill14corp/files/uk_autogrill_-_conso_2020.pdf
Maria Hernandez | [email protected]
Source: UNITE HERE Local 11