L.A. Mayoral Contender Rick Caruso Drops Out Of Bidding At LAX, Cites City's Hostile Business Climate

By Gene Maddaus Thu., May 5 2011 at 3:54 PM

Categories: LAX

Rick Caruso

Mall magnate Rick Caruso has withdrawn from the bidding for a concessions contract at Los Angeles International Airport, citing delays and constraints imposed by airport staff.

Matt Middlebrook, Caruso's senior vice president, said the bidding process has become "too cumbersome and too long." He said the delays were "emblematic of part of the problem with the city of L.A. and its atmosphere toward business."

"I think you'd have a hard time finding anybody who would stand up and say L.A. is a business friendly town," Middlebrook said.

Caruso is mulling a run for mayor in 2013. Some have raised concerns over whether Caruso's bid for the concessions management contract at Tom Bradley International Airport would pose a conflict of interest if he decides to run.

Middlebrook said the two decisions are unrelated.

"Both opportunities have always existed," he said. "One has never affected the other in terms of consideration."

Middlebrook said Caruso was approached more than a year ago and encouraged to participate in the bidding process for a new terminal manager. The contract would involve bringing in new shops and restaurants to spruce up the aging international terminal.

Caruso spent $1 million pursuing the deal, but as the process dragged on it became a less attractive opportunity, Middlebrook said.

"We decided to get out of it," Middlebrook said. "It had the opportunity to be a great knockout project inside the terminal. We think it's shaping up to be a mish-mash."

Specifically, Middlebrook cited the airport's unwillingness to give the contractor control over duty-free shops and advertising, two revenue streams that would have made the deal more attractive.

Middlebrook also said the bidding process will end up being a year behind schedule, giving the contractor limited time to put the new stores in place.

Michael Molina, deputy executive director for external affairs at Los Angeles World Airports, said that the airport was being deliberate on purpose.

"We took our time to do it right," Molina said. "This style of concessions management is new to LAWA, and it was important to us to thoroughly prepare before the solicitation began."

Molina also said the duty-free shops and the advertising were never expected to be included in the contract. He added that the request for bids will be issued next week.

Tags:

airport, LAX, LAX Concessions, Matt Middlebrook, mayor, Rick Caruso

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James McCuen

If Caruso was serious in his criticism of the Airport (LAWA), he would bullet point the list of problems and his proposed solutions. What were the "constraints" imposed by airport staff?

Alan777

Carusso had no business being considered for this contract seeing that he has ZERO experience working in airports, whereas the other management companies that have responded to the previous issuance of this RFP (Airmall, Westfield, MarketPlace) all have extensive experience in airport environments across the country. His participation and consideration was a joke.

James Mccuen

Caruso's idea of hostile is one where he can't get enough government subsidies or preferential treatment.

Just look at the Americana in Glendale.

Caruso was given the land in exchange for a "profit sharing" agreement that allows him to keep up to 12% of profits before "sharing" with the City of Glendale. So far, Glendale hasn't seen any of the "profits." He made a similar "deal" in Thousand Oaks. Yes, you can blame both Cities for doing a poor job looking at for a crook and instead of being duped by one.

And then look how the Republican Billionaire, Caruso, ran to the Glendale to get them to threaten the owner of a hotel with eminent domain instead of just trying to negotiate with the owner on his own.

After a lot of negative publicity and political pressure, Caruso offered Ray Patel a handsome offer of $16.25 million. Why didn't he just do that in the first place instead of running to Glendale for help?

Caruso can take a hike and stay out of LA and political office.

Herbiepokeyman

Withdrawing from airport concessions is unrelated to the Mayor's race? Bull. He just decided he'd rather do the latter. This just gives him an excuse to run.

And the process is "dragging out" only because one of Caruso's attorneys is married to the airport's general counsel, which led to the first bid process being tossed out.