Concessions at O’Hare, Midway get more help from mayor as she leaves office

Three years ago, concessionaires at O’Hare and Midway airports — who either had shut down entirely or saw revenues plummet during the pandemic — got what was supposed to be a temporary lifeline from the city.

Concessionaires who agreed to keep their employees got their rent and fees waived or dramatically reduced. So-called “minimum annual guarantees” were deferred until they reached 75% of pre-pandemic sales — and then were to be re-paid without interest, even after that rebound. Security deposits, letters of credit and maximum operating space requirements were relaxed. Kiosks, food carts and mobile drink dispensers were authorized to boost sales.

Now, Mayor Lori Lightfoot wants to keep at least some of those relief measures in place for up to the first three years of Brandon Johnson’s term.

Presiding over Wednesday’s City Council meeting, her last as mayor, Lightfoot introduced an ordinance that would empower Aviation Commissioner Jamie Rhee to negotiate new and more “limited relief” for O’Hare and Midway concessionaires, some of whom were forced to delay construction projects during the pandemic.

The timing of the three-year extension — just weeks before the traditional summer travel surge — seems curious, to say the least. But it shouldn’t, according to Aviation Department spokesperson Kevin Bargnes.

In an email to the Sun-Times, Bargnes noted that, while passenger volume has increased at O’Hare, it’s still below 2019 levels, “chiefly due to international travel, which has been slow to recover.” Last year, O’Hare served 80.7% of pre-pandemic passengers.

Midway reached 95.5 % thanks to the “surging market for domestic leisure travel.” But even though passenger volume has nearly returned, the pandemic has “caused additional impacts on concessions, crucially through the major supply chain issues that have affected both operational and construction materials and through labor shortages,” Bargnes wrote.

“These factors continue to impact concessionaires at both airports, even as passenger numbers improve, particularly in their efforts to develop and open new concessions in a timely manner,” Bargnes wrote.

The need for continued relief is “greatest at Midway,” where concessionaires need contract extension to obtain financing needed to start building out new spaces, the aviation department spokesman said.

“Many have been unable to begin this work until now due to these ongoing effects of the pandemic. In order to obtain the financing necessary to complete these buildouts, these small business owners at Midway need relief … on their buildout schedules and the length of their operating agreements,” Bargnes wrote.

The continued lifeline may look like an attempt to tie Johnson’s hands, but actually buys the new mayor time he needs to make a smooth transition to airport operations, according to Bargnes.

It will allow the Department of Aviation, whether or not Rhee is retained as commissioner, to “maintain existing contracts and provide time for the incoming administration to provide substantial input into the planned concessions request-for proposals ... in the core terminals” at O’Hare, Bargnes wrote.

In a press release announcing the new lifeline, Rhee noted the levels of minority and women’s participation at Chicago airports — known in federal circles as “disadvantaged business enterprises” — are among the “highest in America.” It’s 55% at Midway and 38% at O’Hare.

Lightfoot was quoted as saying that, even as the travel and tourism industry recovers “one segment that continues to lag behind is airport concessionaires, many of whom are local, small business owners that were nearly wiped out by the sudden fall-off in passenger traffic.”

The ordinance enhances city’s ability “amend agreements already approve by City Council on limited terms in an effort to make Chicago’s concession partners whole.”