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 MRG Denver, LLC to design, build, and operate a Colorado + concession at Denver International Airport.
Approves a concession agreement with MRG Denver, LLC, doing business as Colorado +, for $588,304.00 Minimal Annual Guarantee (MAG) or percentage fee for Beauty of 8% and Gifts of 14% up to $1,250,000 then; 16% $1,250,001 -$2,500,000 and 18% above $2,500,001 and for a term of 7 years to build, manage, and lease on Concourse B in the B Center Core northwest quadrant, in Council District 11. (PLANE-201952061). 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 District11
Contract Control Number:
PLANE-201952061
DEN Conducted outreach events on November 21, 2019, totaling 126 attendees for all events. After submittal and evaluation of responsive proposals, the independent evaluation panel recommended that MRG Denver, LLC., doing business as Colorado + be selected for direct negotiations. Due to COVID this was never activated.
Name (including any “DBA”):
MRG Denver, LLC., doing business as Colorado +
Type and Scope of services to be performed:
MRG Denver, LLC will design, build, manage, and lease a Colorado + on Concourse B in the B Center Core northwest quadrant. MRG Denver, LLC has committed to investing a minimum of $2,675,660.00 to design and build this concession space. To amortize MRG Denver, LLC capital investment, they will receive a contract term of 7 years. Denver International Airport (DEN) will receive the greater of either a guaranteed rent/Minimum Annual guarantee (MAG) of $588,304.00 or a percentage rent of gross sales. The percentage fee will be 8% for Beauty and 14% up to $1,250,000 then; 16% $1,250,001 - $2,500,000 and 18% above $2,500,001 for Gifts. The terms outlined above were submitted by MRG Denver, LLC as part of their proposal to the Request for Proposal (RFP) and were awarded on that information. Minimum Annual Guarantee (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)?
25% Airport Concessions Disadvantaged Business Enterprise (ACDBE) / 25% Minority/ Women Business Enterprise (M/WBE).
The ACDBE partners for this opportunity are Airport Retail Group (17%) and LEI Airport Concessions, LLC (8%). 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?
Competitive Process
For New contracts
Term of initial contract:
7 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:
$588,304.00 Minimal Annual Guarantee (MAG) or percentage fee for Beauty of 8% and Gifts of 14% up to $1,250,000 then; 16% $1,250,001 -$2,500,000 and 18% above $2,500,001
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.)