Airport food court firm owes $4.6M in rent. ‘Entire system failed,’ official says

But the viability of that option was thrown into doubt earlier this year, Global argues, when the airport solicited invitation-only bids for a “special procurement” to replace it altogether.

Byron Amos, the chair of the City Council Transportation Committee, said he first heard about the debt a few months ago and is frustrated that the total was allowed to snowball over nearly a decade.

It happened, he told The Atlanta Journal-Constitution, “over multiple players, multiple mayors and multiple councils.”

“The entire system failed,” he said.

In response to a list of questions from the AJC, airport spokesman Andy Gobeil said officials were unable to reply because the procurement process is in its blackout period and because “the recent Chapter 11 bankruptcy filing by Global Concessions may result in potential litigation with the City.” Global Concessions filed for bankruptcy protection in early April.

The airport, Gobeil said, “is committed to continuously monitoring and enhancing its processes and procedures across the enterprise to uphold the highest standards of business practices.”

‘A huge number’

Amos said he’s heard a range of different numbers of what Global owes the city, between $5 million and $8 million.

“That’s a huge number,” Amos said. “So how did we get to that number, and what were the failures in the system that allowed it to get to this number?”

A bankruptcy attorney for Global told the AJC the company’s debts are still under analysis and it cannot comment beyond the $4.6 million figure listed in the filing.

The city of Atlanta’s Department of Aviation collects rent from the concessionaires that operate businesses at the airport. During the COVID-19 pandemic, City Council authorized some leniency for concessionaires that saw a major hit in revenues as passenger traffic plummeted.

While the city is not commenting with its version of events, a lawyer for Global Concessions late last month wrote a letter to all City council members outlining their side of the story.

The company, founded in 1991 by Terry Harps, grew through the airport’s Equal Business Opportunity program to operate more than a dozen restaurants at Hartsfield-Jackson between Concourses C, B and F.

Global’s “crowning achievement,” its lawyer Michael Coleman wrote to council members, was winning the Concourse C food court contract in 2016 with plans to open restaurants including Bantam + Biddy, Leeann Chin and Krispy Kreme.

But “as a result of circumstances beyond its control,” he wrote, Global was already in debt before construction began.

The concessionaire says it was further impacted when the airport canceled its contract in 2017 — only to reinstate it a year later — which put pressure on Global to finish construction in time for its original schedule.

Ultimately, the concourse’s food court had been empty for nearly five years when Global finally opened the restaurants in late 2019. At the time, it owed about $1.5 million in unpaid rent, Coleman wrote.

Months later, the pandemic shut most airport operations down, further snowballing the financial problem, he said.

Global said the city has since put it on a payment plan, but the company hasn’t been able to keep up.

It recently proposed a solution: sell its assets — and transfer the contract — to concessions giant HMSHost, which would pay the city back in full. Global argues it would also allow a “seamless” transition of operators at the concourse.

Spokespeople for HMSHost did not reply to requests for comment from the AJC.

But in February, Global said, the city issued an invitation-only special procurement bid for the contract without notifying Global, essentially overriding the proposed deal.

By code, the city is allowed to issue a so-called “special procurement” when the chief procurement officer “determines that an unusual or unique situation exists” that makes a normal, open bidding process “contrary to the public interest.”

But if the special procurement moves forward, “Global would be left with no source of revenue to pay its bank” or other creditors, Coleman pled to council members. It would also “leave Global and its owners in financial ruin.”

In a statement to the AJC, Global wrote that it filed for Chapter 11 protection to secure more time to pay back its debts.

“Global remains committed to serving the traveling public without disruption” as it sorts its finances out, the statement reads. “As has been the case with many companies before it, Global expects to emerge from this process as a stronger, more stable company.”

Credit: Kelly Yamanouchi/AJC

Credit: Kelly Yamanouchi/AJC

‘Bountiful conversation’

Global’s situation is not fair to all the other concessionaires paying rent on time, Amos argues.

“How can we justify allowing this to continue and don’t give the same grace to everyone else?”

He said he had been open to a deal like the one Global proposed with Host, simply because his priority is getting the money. “I have been very clear to all sides involved. I am not interested in a deal that doesn’t get the city’s money back.”

According to Global’s letter, the special procurement offer for the C food court requires an up-front fee from a hopeful new operator that would only amount to half of the debt owed.

Amos said he isn’t interested in a fraction of a refund. “I’m interested in all of the taxpayers’ dollars,” he said.

However, the special procurement prevents him from doing much now, he said, given the blackout period for all procurements that prohibits city officials from speaking to concessionaires.

But when City Council reconvenes next week, he predicted, there will be “bountiful conversation” about the issue.