The concessionaire at the state's largest airport and its minority-member-owned business partner are parting ways.
The move opens the door for another business owned by a minority-group member to get a piece of a lucrative partnership. Annual revenue for food, beverage and retail typically exceeds $7 million for HMSHost and its partner at Bill and Hillary Clinton National Airport/Adams Field.
Concessions are an important part of the airport's revenue. Through October, the airport collected $811,208 from the restaurant and lounge segment of its concessions, which is down slightly from the $831,555 it had collected from that segment through the same time in 2014.
Concessions also include parking, rental car operations, ground transportation, terminal advertising and vending. All together, the airport has collected $12 million this year from those sources, almost half of the $26.8 million of its total revenue through October.
Marcus Devine, the owner of Adevco Management LLC in Little Rock, which is the minority business partner with HMSHost at the airport, confirmed Friday that they had agreed to end a relationship that began about eight years ago.
Devine, who was appointed by Gov. Asa Hutchinson in February to be director of the Youth Services Division in the Arkansas Department of Human Services, said it was time.
"I have since taken a day job," Devine said in an interview, referring to his government post. "A lot of irons in the fire."
Devine also served in Gov. Mike Hukabee's administration, including as director of the Arkansas Department of Environmental Quality.
Bryan Loden, vice president of business development at HMSHost, which has held the airport concession contract since 1997, formally notified the airport of the decision in an Oct. 29 letter to Ron Mathieu, the airport's executive director.
"HMSHost and our joint venture partner ... have mutually decided to end our business relationship," he wrote. "We have agreed on financial terms of the separation and are currently finalizing legal documents necessary to complete the transaction."
The dissolving of the partnership, which is expected to be complete by Dec. 1, comes as HMSHost prepares to compete for the airport's business. Its latest contract expires in December 2018.
Devine said he and HMSHost executives began discussions in September about what needed to be done to be competitive to win a new contract, which would extend the business relationship five to seven years.
"We were talking, quite honestly, about the long haul and what the airport needed for an extension of the contract, about what we would need to do to get that," he said. "It's about commitment to the future. That's a pretty strong commitment. I wasn't in position to make that commitment."
Devine said the dissolution of the partnership was unrelated to employee concerns reported by the Arkansas Times earlier this year regarding Adevco employees being paid late.
"Nothing happened," Devine said, adding the employee problems were an "oversight." "It wasn't spurred by any negativity. I've been at it for over eight years. I've enjoyed the partnership. I think it's time to move on."
Loden said HMSHost is "speaking with several" potential disadvantaged business enterprises and is committed "to having active participation back in Little Rock within 90 days of" of Adevco's departure. The U.S. Department of Transportation defines disadvantaged enterprises as "for-profit small business concerns where socially and economically disadvantaged individuals own at least a 51 percent interest and also control management and daily business operations." That could include blacks, Hispanics, American Indians, Asian-Pacific and Subcontinent Asian Americans as well as women.
The Transportation Department encourages such business participation at airports.
Loden said Adevco's 12 employees will become employees of either HMSHost, the food and beverage side of the operation, or World Duty Free, which is the retail side.
Under the terms of its contract with the airport, HMSHost is required to have a partner that is certified as a disadvantaged business enterprise.
Under the contract, HMS must allow a 30 percent participation in the contract by a qualified disadvantaged business enterprise, which required a $650,000 stake in 2007.
Before Devine, the stake had been held by a company owned by former state Sen. Bill Walker, a onetime mayoral candidate and, most recently, the director of the Arkansas Department of Career Education under Gov. Mike Beebe, Hutchinson's predecessor.
HMSHost considered seeking two partners to share the 30 percent participation before Devine was brought in.
The existing contract was scheduled to expire in 2011, but the company and the airport agreed to extend it through 2018 in exchange for a $2.3 million upgrade of the concession facilities.
Under the plan, HMSHost opened a sit-down restaurant and bar beyond the passenger screening area at the airport, added a second Starbucks Coffee franchise in baggage claim and other improvements.
Clinton National is among 114 airports around the world at which HMSHost operates, including the 20 busiest in North America, according to the company website. It also 99 travel plazas in the United States and Canada.
The company has annual sales exceeding $2.7 billion and employs 33,000 worldwide.
Metro on 11/14/2015