While still years away from being completed, the remaking of the Salt Lake City International Airport is expected to mean a smoother, better transportation experience for airline passengers. In the meantime, the project means financial opportunities for local businesses and professionals.
The unveiling of the parking garage, terminal and western ends of two concourses will take place in 2020 and the work on a new north concourse won’t be finished until 2023. That results in a great need for construction and a variety of professional services and commodities — everything from shuttle and parking systems to glass-cleaning and indoor landscaping.
“Those all will be needed to be filled when we get the new airport constructed by 2020, so we have to fill up a new, empty box with all of those things that make the airport work right now, that you might just pass on the way to your flight without noticing,” Cole Hobbs, contracts and purchasing manager for the Salt Lake City Department of Airports, said at the recent PTAC Procurement Symposium, an event highlighting opportunities for local companies to get involved in government contracting. The Procurement Technical Assistance Centers is part of the Governor’s Office of Economic Development.
For example, during the next year, bidding for contracts will take place for legal services; an antenna system; food and beverage, retail and advertising concessions; maintenance services; public vending; janitorial services; mechanical engineering and many other products and services.
A few contracts will be phased out with current contractors in place until their facilities are replaced. “So the next three years, we’ll be kind of patching along with those current contractors, but in that timeframe, we’ll be selecting all-new firms to help us maintain and keep the airport going,” Hobbs said.
“As we build new facilities, it’s going to create new concession opportunities,” said Brad Wolfe, concessions manager at the airports department.
Not only will architectural, design and construction jobs related to concessions spring from the remade airport, but every concession space will be available in a competitive process, with none of the current concessionaires grandfathered in, he said. Requests for proposals (RFPs) are expected to be issued soon, and Wolfe expects many companies to be interested.
“It is very good business. If you’re a good operator, if you can dial it in, you can generate a lot of revenue,” Wolfe said.
In fact, concession sales in 2016 topped $100 million. This year is expected to see that figure rise to $110 million.
“That’s a lot of hamburger buns, a lot of napkins, a lot of bottled water,” he said. “A lot of the product is sourced locally, so it gives the locals an opportunity to provide the supplies and materials to the program on a regular basis. So you don’t have to necessarily have a store or a restaurant or a gift shop. You can become a supplier and do very well.”
Food and beverage concessions accounted for $66.6 million of the 2016 figure, an average of $3.7 million for full-service restaurants, $1.8 million for quick-service restaurants and $1 million for coffee shops. News and gift stores had $16.5 million in sales, for an average of $1.4 million. Specialty retailers did a total of $14.8 million in business. Vending of snacks and beverages totaled $540,000.
Concession companies not only rack up sales by being at the airport but also gain exposure to more than 23 million flyers each year.
“Twenty-three to 24 million passengers walking by your store, it’s is really good exposure. Not only do they get to walk by your store, but they get to go in and sample it and try them out. It’s surprising how many out-of-town visitors have developed loyalties to some of the local brands that are in the airport right now,” he said.
The public solicitation process for concessions will take place early in 2018, even if the facilities won’t open for three more years. The airports department is offering orientation sessions about doing business at the new airport. The next one is set for 2-4 p.m. Nov. 30 at the Airport Training and Activity Center (ATAC) at 1911 N. 2200 W.
“If you’re not in the restaurant business or in the retail business, if you have a favorite restaurant, if you have a favorite store you go to, let them know about the opportunity,” Wolfe said. “What’s going to happen is there’s going to be a big announcement when we’ve made all of our selections, and then we’ll have people calling us and saying, ‘Wait a minute. I would’ve been interested.’ Get the word out. Let them know that this process is coming up really quickly.”
One huge airport project element is construction. Part of the symposium session focused on the $740 million, 31-gate north concourse, which will feature a Phase 1 western end opening by perhaps 2020 — in conjunction with the opening of the new terminal, parking garage and south concourse west end — and a Phase 2 eastern end opening in 2023. That concourse will be parallel to the new south concourse, with two underground tunnels connecting the concourses.
Construction bidding is expected to begin early next year. The deadline has passed for pre-qualification with Austin Okland, a joint venture acting as construction managers for the airports department, for the Phase 1 portion. But Gary Ralls, program director for the north concourse, said local contractors can still get involved.
“Even if you don’t choose to pre-qualify and you want to work under a major contractor — if you’re a drywaller and want to work under one of the local drywalling firms, or you’re a painter — you don’t have to pre-qualify for that. You just have to bid to them,” Ralls said.
“What we’re really trying to do is split up a lot of those scopes and then bid the painting direct and bid the drywall direct. … We’re looking to maybe contract directly with a lot of smaller scopes and bring those smaller contractors to the airport.”