This article was republished with permission from WTOP’s news partners at Maryland Matters. Sign up for Maryland Matters’ free email subscription today.
A divided Board of Public Works on Wednesday ended a bumpy, years-long process to find a concessions operator at BWI Thurgood Marshall Airport, awarding a lucrative 23-year contract to the incumbent concessionaire.
Gov. Wes Moore (D) and Comptroller Brooke Lierman (D) voted to give the contract to Fraport Baltimore Partnership LLC, an updated corporate iteration of the same company that has overseen concessions at the state-owned Baltimore-Washington International — retail, dining and other hospitality services — for the past two decades.
Treasurer Dereck Davis (D) asked sharp questions of Maryland Department of Transportation Deputy Secretary Samantha Biddle for almost half an hour, largely over the proceeds the deal would provide the state. He wound up casting the sole no vote on the three-member board.
“From my standpoint, getting it done right has taken a backseat to getting it done quicker,” Davis said before casting his vote.
The vote brings to a close a three-year, start-and-stop procurement that was shrouded in secrecy and tinged with controversy.
The Maryland Aviation Administration, which runs BWI, began soliciting bids for a new concessions operator in 2022, when Larry Hogan (R) was still governor. But the procurement was put on hold that fall after critics told Maryland Matters they feared the process had been rigged to favor one of the bidders, a new entity with political connections.
Moore ordered state transportation officials to start a fresh procurement shortly after he took office in 2023, tasking MDOT, the aviation administration’s parent agency, to take the lead.
Last fall, documents obtained by Maryland Matters showed that MDOT was recommending that the contract go to URW/Harbor Bankshare, a partnership between the international development company Unibail-Rodamco-Westfield SE and Harbor Bank of Maryland. But sometime later, negotiations between the state and the company hit an impasse, so MDOT wound up recommending Fraport.
BPW was supposed to approve the Fraport contract proposal at its Jan. 29 meeting, but the item was pulled from the agenda that morning, without explanation.
Moore on Wednesday said Fraport offered “an impressive development plan” that would make the airport more attractive to travelers, boost economic development in the region, provide ample business opportunities to minority contractors and guarantee collective bargaining rights to workers at airport restaurants and gift shops.
“To make this happen, it took a lot of work and a lot of commitment,” Moore said, thanking MDOT officials.
“We’re looking forward to this being a great economic generator for the state,” said Roxie Herbekian, president of UNITE Here Local 7, which represents several hundred food and retail workers at the airport.
The 23-year contract gives Fraport one year for what is known as the development phase and two years for a renovation phase, before the full 20-year operational and managerial portion of the deal kicks in.
Fraport is projecting gross sales of $734.3 million from airport concessions over the first five years of the contract. The company has committed to sharing 90% of its revenues with the state and estimates that it will be able to pay $39.3 million to the state in the first full year of the operations phase.
Moore and other state officials said Fraport has made stellar commitments to providing subcontracts to minority-owned businesses, to run discrete food and retail operations, a major federal requirement for airport procurements. The company, which operates concessions at 30 airports around the world, boosted its diversity score in the Maryland bidding process by adding a Black-owned Baltimore-based development company to its leadership group.
That entrepreneur, Ernst Valery, and Sabine Trenk, CEO of Fraport USA, attended Wednesday’s board meeting but did not speak.
Fraport also agreed to make $31 million in capital improvements to BWI and to keep food prices relatively low at the airport. Additionally, the company has pledged to reduce carbon emissions and promote recycling at the airport.
Biddle, the MDOT deputy secretary, said the three final bidders for the contract — not including the URW/Harbor Bankshare partnership, which dropped out — essentially scored equally when it came to financial considerations for the state. But she said Fraport’s bid was significantly better on technical questions — and that the technical scoring accounted for 75% of MDOT’s calculations when considering how to award the contract.
That explanation aggravated Davis, who suggested that during a dire fiscal crisis for the state, relying so heavily on technical scores was a mistake. He started his line of questioning by repeating a frequent saying of the governor’s.
“A wise man once said that we are asset-rich but strategy poor,” Davis said, prompting Moore to observe that he didn’t think he was so wise.
Biddle acknowledged Davis’ concerns but said MDOT officials believed Fraport would be “the state’s strongest partner.” She added that the new contract would generate far more revenues for the state than the one Fraport is currently operating under.
“Certainly, sir, there are a number of factors, on the technical side and on the financial side,” she told Davis.
Davis wondered why board members weren’t able to see the full details of the competing bids; Biddle explained that doing so could jeopardize certain proprietary information contained in the documents.
“I assure you a thorough evaluation process … did occur,” she said.
Davis also marveled at the proposed length of the contract.
“I’m 57 years old,” he said. “If I’m so fortunate to be alive when this contract ends, I’ll be 80.”
Davis finally asked whether there would be harm in delaying a vote on the contract — or scrapping it altogether. Biddle replied that further delay would stall necessary capital improvements at the airport and frustrate and possibly scare off subcontractors who have been operating with month-to-month leases for several months.
Lierman also asked several tough questions, but appeared to word them in a way that would enable Biddle to offer clear justifications for the state’s decision to recommend Fraport for the contract. She observed that delaying the award would cost the state valuable sales tax revenues and said the financial package for this contract is vastly superior to the prior contract.
“The plans are creative and inviting for Maryland visitors and those of us coming home or flying out,” Lierman said. “I just think remaining in a month-to-month contract means empty food and retail spaces in a brand-new concession space and that is a huge risk to the state. Nearly 30 million people travel through BWI annually, and it would … be embarrassing not to have any concessions in a new space to offer travelers.”
After the vote, Trenk, the Fraport USA CEO, released a statement calling the new contract “a tremendous opportunity but also a profound responsibility.”
“Our vision for BWI Marshall launches from a storied past and reimagines the future of over 118 concession spaces that will lead the industry in new and exciting opportunities for passenger interaction, traveler engagement, revenue enhancement and a world-class experience,” the statement said.
