Contract Request Template (Contracts; IGAs; Leases)
Date Submitted: 11-27-2023
Requesting Agency: Denver International Airport
Division:
Subject Matter Expert Name: Pamela Dechant
Email Address: Pamela.Dechant@flydenver.com <mailto:Pamela.Dechant@flydenver.com>
Phone Number:
Item Title & Description:
(Do not delete the following instructions)
These appear on the Council meeting agenda. Initially, the requesting agency will enter a 2-3 sentence description. Upon bill filling, the City Attorney’s Office should enter the title above the description (the title should be in bold font).
Both the title and description must be entered between the red “title” and “body” below. Do not at any time delete the red “title” or “body” markers from this template.
title
A resolution approving a proposed Agreement between the City and County of Denver and Denver Concession Group, LLC to design, build, and operate a Shake Shack concession at Denver International Airport.
Approves a concession agreement utilizing the Premium Value Concession Award Benefit with Denver Concession Group, doing business as Shake Shack, $894,413.00 Minimal Annual Guarantee (MAG) or percentage fee of 16% Food & Beverage and 18% Alcohol, and a term of 10 years to design, build, manage and lease on Concourse A, Center Core southwest quad, in Council District 11. (PLANE-202369881). The last regularly scheduled Council meeting within the 30-day review period is on 1-2-2024. The Committee approved filing this item at its meeting on 11-29-2023.
body
Affected Council District(s) or citywide?
Council District 11
Contract Control Number:
PLANE-202369881
Vendor/Contractor Name (including any “DBA”):
Denver Concession Group, doing business as Shake Shack
Type and Scope of services to be performed:
Denver Concession Group, LLC will design, build, manage, and lease a Shake Shack on Concourse A, Center Core southwest quadrant. Denver Concession Group, LLC has committed to investing a minimum of $1,870,900.00 to design and build this space and to construct a new food court. To amortize Denver Concession Group, LLC’s capital investment and food court build-out, they will receive a contract term of 10 years. Denver International Airport (DEN) will receive the greater of either a guaranteed rent/Minimum Annual guarantee (MAG) of $894,413.00 or a percentage rent of gross sales. The percentage fee will be 16% for Food & Beverage and 18% for Alcohol. MAG is the initial calculation based on the projected gross sales by the concessionaires for the space multiplied by the proposed percentage fee listed above. MAG is recalculated each contract year and will be equal to the greater of the initial MAG or eighty-five (85%) of the total Privilege fees payable in the prior Contract Year.
Location (if applicable):
Denver International Airport
WBE/MBE/DBE goals that were applied, if applicable (construction, design, Airport concession contracts):
WMBE
Are WBE/MBE/DBE goals met (if applicable)?
40% Airport Concessions Disadvantaged Business Enterprise (ACDBE) / 25% Minority/ Women Business Enterprise (M/WBE).
The ACBDE partner for this opportunity is Airport Hospitality Services, LLC. (40%) M/WBE firms will be selected by the concessionaire's selected General Contractor, after the execution of the concession agreement and the construction contract. The M/WBE firms are reviewed and approved by DSBO prior to DEN's issuance of Notice to Proceed with construction for the concession location. A Notice to Proceed is provided by DEN to the concessionaire after all applicable documents, such as Bonds, Insurance, Permits, and DSBO approval, have been provided by the concessionaire, and their selected general contractor to begin construction of the concession location.
Is the contract new/a renewal/extension or amendment?
New
Was this contractor selected by competitive process or sole source?
No
Denver International Airport (DEN) collaborated with its concessionaire partners to develop and implement the Premium Value Concessions Program (PVC). The program established an internal competition to recognize the top-performing concessions. These top performers are awarded the program benefit which is the opportunity to bypass the competitive request for proposal (RFP) process and begin a new lease negotiation with the airport. For those concessions not earning the Program Benefit, DEN will issue an RFP and competitively bid out those concession locations.
For New contracts
Term of initial contract:
10 years
Options for Renewal:
How many renewals (i.e. up to 2 renewals)?
Term of any renewals (i.e. 1 year each):
Cost of initial contract term:
$894,413.00 Minimal Annual Guarantee (MAG) or percentage fee of 16% Food & Beverage and 18% Alcohol.
Cost of any renewals:
Total contract value council is approving if all renewals exercised:
For Amendments/Renewals Extensions:
Is this a change to cost/pricing; length of term; terms unrelated to time or price (List all that apply)?
If length changing
What was the length of the term of the original contract?
What is the length of the extension/renewal?
What is the revised total term of the contract?
If cost changing
What was the original value of the entire contract prior to this proposed change?
What is the value of the proposed change?
What is the new/revised total value including change?
If terms changing
Describe the change and the reason for it (i.e. compliance with state law, different way of doing business etc.)