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  • Long drama over BWI concessions contract may be nearing a close – WTOP News

    Long drama over BWI concessions contract may be nearing a close – WTOP News

    The state is moving closer to awarding a lucrative 20-year contract to run the concessions operations at BWI Thurgood Marshall…

    This article was republished with permission from WTOP’s news partners at Maryland Matters. Sign up for Maryland Matters’ free email subscription today.

    The state is moving closer to awarding a lucrative 20-year contract to run the concessions operations at BWI Thurgood Marshall Airport — a year and a half after Gov. Wes Moore (D) pulled the plug on the initial procurement process, which was laden with controversy.

    Maryland Matters has learned that an evaluation committee at the Maryland Department of Transportation has recommended granting the contract to URW/Harbor Bankshare, a partnership between the international development company Unibail-Rodamco-Westfield SE and Harbor Bank of Maryland. URW is best known for building and operating shopping centers, including four in Maryland. The Board of Public Works is expected to vote on the recommendation by year’s end.

    High-priced government procurements are frequently shrouded in secrecy, and agencies that run them and the companies that bid on the contracts are usually prevented from speaking publicly.

    Asked this week to confirm that the agency evaluation committee favored URW/Harbor Bankshare to run all concessions at BWI, and a series of related questions, David Broughton, an MDOT spokesperson, would say only, “This is still an active procurement, and the Maryland Department of Transportation expects to take the item to the Board of Public Works for approval by the end of the year.”

    But correspondence obtained by Maryland Matters between the agency and the companies that did not get the nod from MDOT’s screening committee show that URW/Harbor Bankshare was the top choice, “considering both the technical and financial factors set forth” in the state’s call for bids.

    Fraport/BWI Partners, the incumbent concessionaire that has held the contract under different corporate names for two decades, was the runner-up, according to the documents, which went out in late August. BWI Experience Partners, a partnership between national airport concessions operator Vantage Airport Group and half a dozen Black entrepreneurs from Maryland, was ranked third. An entity called Asur/RMD BWI JV, which is affiliated with ASUR, a Mexican airport services company, finished fourth.

    Unibail-Rodamco-Westfield is best known for building and operating shopping centers throughout the world, including Westfield-branded malls in Potomac, Wheaton, Hyattsville and Annapolis. It also operates concessions in certain terminals at JFK International Airport in New York, Chicago O’Hare International Airport and Los Angeles International Airport.

    The company that is ultimately chosen by the Board of Public Works for this contract will oversee concessions — food, drink, retail and other hospitality services — at BWI for 20 years, working with several leaseholders and subcontractors who operate the stores, restaurants, snack bars and other commercial services at the busy state-owned airport.

    But these contract awards are never a done deal until the Board of Public Works votes — and even then there is an appeals process.

    While this procurement has yet to produce the controversy of the one that Moore canceled shortly after taking office in 2023, there still appear to be some unanswered questions that may give board members — Moore, Comptroller Brooke Lierman (D) and Treasurer Dereck Davis (D) — some pause.

    For one, Unibail-Rodamco-Westfield, which is based in Paris, signaled in 2021 that it wanted out of the U.S. market, and has been offloading properties ever since, including the Annapolis Mall in August — though it has been reinvesting in certain other developments. Is the company committed to maintaining its U.S. airport contracts? The CEO of URW’s airports division, Dany Nasr, resigned in August after a year and a half on the job.

    “This journey has been extraordinary, driven by our mission to uplift the travel experience by placing people at the heart of everything we do,” he wrote to colleagues upon his departure.

    BPW members may also want to know why the MDOT evaluation, according to people with knowledge of the process, did not include interviews with the companies or requests for “last and best offers,” a standard practice in procurements. They may want to know who was on the MDOT screening committee. Pointedly, MDOT took the contract decision away from the Maryland Aviation Administration, which operates BWI, and its administrator, Ricky Smith, after Moore canceled the procurement last year.

    Additionally, BPW members may want to know whether the Westfield bid was the best for meeting the state’s ambitious Minority Business Enterprise goals, which Moore has made a priority, particularly for state government contracts.

    The state initially began advertising for a new concessions operator for the airport in mid-2022, during the administration of former Gov. Larry Hogan (R). The Maryland Aviation Administration, a division of MDOT, put out a formal Request for Proposal (RFP) seeking bids for the contract, which is expected to provide tens of millions of dollars for both the vendor and the state’s coffers.

    But as Maryland Matters first reported, the process quickly ran into criticism, after the aviation administration twice changed the RFP in ways that appeared to favor one company — New Market Development Joint Venture LLC, a politically connected firm that was launched just months before the bidding began. One alteration, dealing with the level of experience needed to run concessions at BWI, clearly benefited New Market Development, because the company would not have qualified for the contract without the change.

    Passengers walk through a terminal at BWI Thurgood Marshall Airport. Photo by Alex Wong/Getty Images.

    In November 2022, MAA staff recommended awarding the contract to New Market Development, whose majority owner is Major Riddick, a former chief of staff to ex-Gov. Parris Glendening (D) and longtime fixture on the Maryland political and government scene.

    New Market Development was bidding to be one of the very few minority-owned businesses to run an airport concessions program in the U.S., though in most airport procurements, federal rules dictate that minority- and women-owned businesses are given preferences on many subcontracts.

    Riddick has operated fast-food franchises at BWI and at the airport in Pittsburgh for many years, but has no experience running a broader concessions contract.

    In December 2022, before the Board of Public Works got around to voting on the aviation administration’s recommendation, the MAA sent a brief message to all bidders, saying the contract process was being put on hold. Fraport sued the state during the same week, seeking to block New Market Development from getting the contract. It also said it would dispute any award of the BWI contract to Riddick’s company to the state’s Board of Contract Appeals — though MDOT officials said at the time that this particular contract could not be contested to that board.

    Fraport, an international company that runs airport concessions around the world, has been allowed to temporarily maintain the airport concessions contract, which its corporate predecessors first won when former Gov. Bob Ehrlich (R) was in office. The company’s other concessions operations include Ronald Reagan Washington National Airport, Washington Dulles International Airport, Nashville International Airport, Cleveland Hopkins International Airport and terminals at JFK and Newark Liberty International Airport.

    One month after he took office, in February of 2023, Moore announced that he wanted the procurement process for airport concessions to go back to the drawing board.

    “BWI Marshall is an economic driver for our state and our region,” Moore said at the time. “The retail and concessions program is a key element to the growth and success of the airport, and my administration is committed to carefully crafting a new solicitation and a procurement process that encourages robust competition, fairness, and provisions that align with our administration’s values and short-term and long-term economic strategies.”

    When the state sought bids a second time, MDOT, rather than the aviation administration, became the lead agency for evaluating the proposals. Time will tell whether the state’s top leaders believe the agency has succeeded this time.

    Ivy Lyons

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  • Cost of Purple line increases yet again, completion pushed back – WTOP News

    Cost of Purple line increases yet again, completion pushed back – WTOP News

    Officials announced the extra payments along with a roughly 234-day delay that will push the line’s completion back from spring of 2027 to December of that year.

    This article was republished with permission from WTOP’s news partners at Maryland Matters. Sign up for Maryland Matters’ free email subscription today.

    A Purple Line construction site in Riverdale on Feb. 29, 2024. Photo by Josh Kurtz.

    The Maryland Transit Administration will seek approval next month for as much as $425 million in “relief payments” related to delays in the Purple Line light rail project.

    Officials announced the extra payments along with a roughly 234-day delay that will push the line’s completion back from spring of 2027 to December of that year.

    “The MTA team has been working incredibly hard and over the past year,” Holly Arnold, administrator of the Maryland Transit Administration, said in an interview Friday. “We did complete the utility work. So, October the utility work was completed. December the operations and maintenance facility work was complete. We’re now out of that part of the construction business and so it really is now on the concessionaire and the design builder. But as part of that, we did need to kind of do a final change order to close out that chapter of the project. And so that’s what this is doing now.”

    “We made the choice at that time: Let’s keep everything going with this. It’s an important project. We need to keep advancing it,” Arnold said. “We don’t want to let the community sit with it half finished and suffer for two years. And so doing that we did take on a lot of utility work. Which is a risky part of any project.”

    Nearly 90% of the utility work is now complete. Ray Biggs, a senior project director with the administration said the remaining work should not cause additional delays or costs.

    The 16.2 mile east-west line connects the New Carrollton Metro station in Prince George’s County and the Bethesda Metro station in Montgomery County and includes 21 stops.

    The line is being built under a Public-Private Partnership or P3 agreement. Purple Line Transit Partners agrees to build the system for the state and maintain it over three decades. The state pays the private company and when the term is over, the entire project reverts to state ownership.

    The project — proposed under former Gov. Martin O’Malley (D) — broke ground in 2016, a year after former Gov. Larry Hogan (R) was sworn into office. Hogan canceled a similar project in 2015 — Baltimore’s Red Line — calling it “a boondoggle.”

    At that time, the cost of the Purple Line project for the nearly four-decade span was pegged at $5.6 billion.

    Biggs said the project is now 65% complete, with 13 of 21 stations in active construction. Additionally nearly 17,000 linear feet of track has been laid.

    The first light rail vehicle is expected to arrive from Elmira, New York, this spring.

    As part of the agreement, Purple Line Transit Partners will receive an initial $60 million from the state. Additional payments will be made as the company hits certain milestones such as the delivery of rail cars.

    Other milestones include completion of major construction work on the University of Maryland College Park campus, the reopening of the Capital Crescent hiker-biker trail between Silver Spring and Bethesda, and commencement of systems testing, Arnold said

    Seven months ago, the Board of Public Works approved an additional $148 million in payments to Purple Line Transit Partners. The money covered cost overruns and delays that pushed the project to spring of 2027.

    The utility work payment is on top of $449 million in payments spread out over the next several years that is part of an increase already in the proposed Consolidated Transportation Program.

    Arnold said those funds are part of the state’s contractual obligations to pay the builder for maintaining the project as well as for repaying of the bonds.

    Gov. Wes Moore (D), speaking at the time, said he was “firmly committed to making sure we’re getting this critical project back on track and also minimizing future delays and costs.”

    State Comptroller Brooke Lierman (D) at the meeting said she believed “we’re all done with additional delays and more modifications for the Purple Line.”

    Arnold on Friday called that July request an interim payment.

    The additional funding being sought pushes the cost of the project to about $4 billion. Including financing over the 36-year life of the project, the cost is $10 billion.

    This breaking news story has been updated with more details.

    Ivy Lyons

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