When COVID-19 stay-at-home orders and travel restrictions were enacted in March 2020, many of the more than 160 PHL Food & Shops concessions were forced to shutter their gates. As governances were modified to allow for a wider variety of shops and restaurants to reopen, the airport’s concessionaires began returning to all the terminals. Leading the way were Airport Concessions Disadvantaged Business Enterprise (ACDBE) program participants. Currently, of the 86 PHL Food & Shops merchants operating, 53 have overall ACDBE participation, whether through 100 percent operators or through joint ventures.
ACDBE programs provide the assistance socially and economically disadvantaged small businesses owners need to successfully compete against larger firms for contract opportunities at airports. ACDBEs can enter agreements directly with an airport or as a subcontractor with a Prime (another concessionaire or owner or lessee of a terminal). U.S. commercial service airports that receive Airport Improvement Program (AIP) and have concession revenues of $200,000 or more for either car rental or non-car rental concessions are required by the Federal Aviation Administration to have an ACDBE program. The program at PHL is called PHL Food & Shops, formerly MarketPlace PHL). The program’s annual ACDBE required FAA diverse business goal is 19.3 percent; in 2020, the program achieved 41.39 percent participation.
Melwood Hannah, Vice President and General Manager at MarketPlace PHL and Executive Vice President of LeJeune and Associates, the ACDBE Partner with MarketPlace Development, is responsible for the on-site day-to-day operations of the PHL Food & Shops Program. This includes managing the Food & Shops ACDBE program at PHL.
“The ACDBE program is a core tenet in the overall management of the PHL Food & Shops program in alignment with the City of Philadelphia’s objective to increase minority participation,” said Hannah. "As an ACDBE and local business, LeJeune and Associates is committed to providing opportunities to minority businesses and nurturing them to be successful in the airport environment. We are excited that despite the impacts of the pandemic and currently having approximately 50 percent of our program closed, we are achieving over 44 percent ACDBE participation.”
The volatility of COVID-19 and its impact on the travel industry’s recovery might understandably be a
deterrent for anyone considering opening a business in an airport. M2 Concepts LLC, owned by brothers and seasoned ACDBE concessionaires Ray and Leonard Mickens, continued with plans to open Passyunk Steaks and Tagliare Pizza at the top of Terminal B. The eateries, which are a joint venture with terminal lessee OTG, were just a few months into construction when COVID-19 halted the project. “My faith kept me going with the project,” said Ray. “When we resumed construction, we had to limit the number of workers on the jobsite for health and safety precautions and everyone needed proper PPE, which added to our cost. When it came to hiring and training staff, we brought on a limited team, not knowing what the airport traffic would be, with the intention of growing from there. Normally, you start with a bigger staff and adjust as needed.” Despite the new challenges, Passyunk and Tagliare opened in October.
Ray, who played cornerback in the NFL from 1996-2006, opened his first airport concession — The Pop Zone, a pretzel, popcorn and Pepsi cart—at PHL in 1999 with his uncle, Guy. “I majored in business at Texas A&M and was looking to set myself up for life after football. My family is from Philadelphia and Guy found the opportunity at PHL,” said Ray. Today, M2 Concepts operates restaurants including Chick-fil-A, Starbucks and Qdoba in airports including Dallas-Fort Worth (DFW), Minneapolis-St. Paul (MSP), San Antonio (SAT) and Washington, D.C.- Dulles International (IAD). Passyunk and Tagliare mark M2 Concepts’ return to Philadelphia.
“I can’t say enough about Clarence [LeJeune] and Mel at MarketPlace,” said Ray. “They were the first people we met in the industry and we stayed in touch over the years. They care about their concessionaires as people and that means a lot.”
Operating an airport concession is more involved than running a franchise in a shopping center due to strict federal regulations across several categories. “ACDBE certification paperwork has to be completed and approved, employees need to have badges to access the airport and delivery systems have to adhere to security policies,” said Ray. “The spirit of the ACDBE program is to learn from your prime, grow and develop an independent team; to get off the Similac and move.”
Sandy and Terri Roberts, owners of Onsite Retailers, have been ACDBE-certified operators at PHL since 2013, when they opened Pinkberry, a handcrafted yogurt bar. In 2019, they entered a joint venture partnership with Stellar Partners and their PHL portfolio now includes White House Black Market, Chico’s, Soma, and The Philadelphia Tribune store.
“We had just opened the second of our two Philadelphia Tribune stores at PHL when COVID-19 devastated the industry,” said Sandy. “It’s disappointing that we haven’t been able to meet the full potential of those outlets yet.”
The COVID-19 pandemic also impacted the closing of a PHL Onsite Retailers’ property. “The Pinkberry lease expired in May at the height of COVID,” said Terri. “We were forced to close earlier than expected due to state orders. We had a lot of equipment to move and a skeleton staff since most of our staff had to be furloughed. MarketPlace was great. They worked with us and provided support to assist with the closing and removal of equipment.”
Sandy and Terri also noted that the rent relief program offered to tenants by the Division of Aviation was especially appreciated by operators.
Onsite Retailers operates more than 20 brands independently and with Joint Venture partners, such as Onsite News, Kiehl’s, Au Bon Pain and Hudson News in six airports, including IAD, Reagan Washington National Airport (DCA), Baltimore/Washington International Thurgood Marshall Airport (BWI), Pittsburgh International Airport (PIT) and Nashville International Airport (BNA). The Roberts’ started in the airport retail industry at BWI in 2003. “It was a fluke introduction by a friend,” said Sandy. “We had a business on the street and realized the airport was a unique space. Thanks to our partners at the time, we grew and were able to move to other locations with them.”
The Roberts say without the ACDBE program, getting into an airport would be difficult. “The construction costs alone are daunting, and many things look like barriers. Operating hours are longer than street locations and you have to consider extra costs like parking for employees,” said Sandy. “Buildouts are more expensive and it takes a while for a business to be profitable. Operators have to be patient.”
Both M2 Concepts and Onsite Retailers use their years of experience to mentor other ACDBEs.
“The partners we had early on like Hudson Group were our mentors and helped us grow and create our own brand,” said Terri. “In return, we’ve taken small vendors under our wings. Whether it's assisting with RFPs or walking a smaller operator through the certification process, we try to share what we've learned in this industry and hope it will benefit other small operators."
Ray often speaks on the reality and rewards of being an airport merchant to those interested in starting a business and lends his support for ACDBEs beginning their journeys. “There’s space at the airport for everyone.”