St. Paul Downtown Airport Request for Restaurant Lease Agreement. M&O Committee June 5, 2017: Joe Harris & Liz Grzechowiak

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1 St. Paul Downtown Airport Request for Restaurant Lease Agreement M&O Committee June 5, 2017: Joe Harris & Liz Grzechowiak

2 BACKGROUND Holman Field overview History of Administration Building / Terminal Previous restaurant history MAC investment Flood wall Building improvements Public viewing space 2

3 ST. PAUL DOWNTOWN AIRPORT 3

4 ST. PAUL DOWNTOWN AIRPORT 4

5 POLICY Concessions are awarded by either a Request for Proposal process (RFP), a bid process, or a direct negotiation. The method used will depend on a number of factors that include, but are not limited to, type of business opportunity, number of interested parties, maximizing revenue to MAC, current economic conditions, customer service, and level of investment required by a new or existing concessionaire. No special treatment is afforded to an incumbent in a bid or RFP process. 5

6 OUTREACH 1999: Restaurant closes and MAC attempts to lease space 2005: MAC issues RFP and receives zero proposals 2007: MAC constructs and finalizes flood wall 2015: Hockey Day MN highlights Holman Field and peaks interest 2016: MAC initiates building improvements, CMAA engaged and Super Bowl planning commences 2017: Targeted outreach and MSP Concessions Leasing Series, all leads engaged 6

7 ALLY HOSPITALITY, LLC Troy Reding is Founder and Principal Consultant at Ally Hospitality LLC. Reding has 31 years of experience in restaurant operations 24-years at T.G.I.Friday s culminating in the position of Director of Operations, Midwest Region Vice President of Operations for Twin Cities-based Blue Plate Restaurant Company. This is where he led a group of nine individual concepts that grossed over $30 million in sales and employed over 500 people. Reding facilitated the successful openings of several restaurants with both Friday s and Blue Plate, including The Lowry and The Freehouse. 7

8 ALLY HOSPITALITY, LLC Reding partnered with his long-time friend, Brad Sorenson, to open Rock Elm Tavern in Plymouth, Minnesota in September Sub-urban tavern which brings the best of the downtown dining experience to the suburbs. On-trend food, cocktails, and craft beer Strong corporate culture, lead by example Strong sales with annual growth & gains 8

9 EXPEDITION AT HOLMAN FIELD The intent is to create a destination dining experience highlighting world travel and adventure. Breakfast and lunch will have friendly, efficient, accessible menus and service while evening guests will have a more refined menu and service experience. Catering available on site for special events and for delivery. The menu is a chef-driven journey of food inspired by the world s cuisine, while focusing on local roots. The proposed beverage program is to honor classic cocktails from around the world made with the spirits from local craft distilleries. The beer program will feature Minnesota breweries with a focus on St. Paul, while the bottle selection will highlight national and European brews. 9

10 PROPOSED TERMS Term: 5 years, with additional 5 year option Annual rent based on Terminal rent per square foot with percent rent offer at gross sales break points MAC shall designate Ally Hospitality as the exclusive caterer of the adjacent event space with exclusions for events hosted by MAC or tenants of the Administration Building, or events which Ally Hospitality declines or cannot cater Utilities: Water, gas, and electric costs to be paid by tenant Common Area Maintenance (CAM) fee to be paid by Tenant to MAC An ACDBE goal of 2% for good and services 10

11 CAPITAL INVESTMENT MAC is proposing to invest up to $225,000 Covers furniture, small building repairs, and restaurant equipment. Contribution would be from the Reliever Airport portion of the Capital Improvement Program (CIP) Staff will bring a CIP adjustment item to Planning, Development and Environment Committee at a future date in order to get authority to expend 2019 CIP dollars in Additionally, MAC shall perform a minor refreshment of the shared restrooms and event space. 11

12 CAPITAL INVESTMENT Ally Hospitality will make a minimum capital investment of $275,000 to build out the restaurant and purchase necessary supplies and equipment. Pending June Commission approval, Expedition Restaurant and Bar projects to be open in winter of

13 CONCLUSION An airport restaurant will enhance the customer experience and raise the profile of Holman Field. It has been nearly 20 years since Holman's Hideaway closed. MAC and public share an interest in access to airplane viewing Airport users and employees are excited at the prospect of a restaurant reopening. On site events and catering Catering amenity for tenants Daily food and beverage service 13

14 COMMITTEE ACTION REQUESTED RECOMMEND TO THE FULL COMMISSION TO AUTHORIZE STAFF TO ENTER INTO A LEASE AGREEMENT CONSISTENT WITH THE TERMS ABOVE FOR THE OPERATION OF A FOOD AND BEVERAGE CONCESSIONS WITH ALLY HOSPITALITY, LLC AND THAT THE EXECUTIVE DIRECTOR/CEO OR HIS DESIGNEE BE AUTHORIZED TO EXECUTE THE NECESSARY DOCUMENTS. 14

15 QUESTIONS? 15