The Atlanta City Council voted Monday to cut rent for Hartsfield-Jackson International Airport's struggling duty free operator and to extend its lease.
Atlanta airport general manager John Selden told council members last week that Duty Free Americas Peachtree LLC has lost $39 million over its seven-year contract at Hartsfield-Jackson. He said international traffic volumes have not grown as much as expected.
The duty free concessionaire told the airport the current minimum rent of $15 million a year is not financially feasible, according to Selden.
City council members voted in favor of reducing the rent to $10.5 million annually and to exercise a three-year lease extension option. As part of the extension, the airport will take back Coach and Michael Kors stores from Duty Free Americas and convert those locations into eateries.
Representatives for airport concessions workers union Unite Here said they think the contract should have been rebid.
Selden said the airport chose to extend the agreement and reduce the rent, rather than have the duty-free stores close for a year or more while the contract is rebid and lose $10.5 million a year in rent.
The city council on Monday voted 11-4 in favor of reducing the rent and 13-2 in favor of the lease extension.
“We’re disappointed,” said Bo Delp, a Unite Here organizer. “This is the first step for the airport in a very long process of deciding who is going to do business at this airport, and the reality is that that process must be open and fair and transparent. And we are going to continue to hold those decision makers accountable as that process continues.”
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