MD board approves lucrative BWI concessions deal, ending protracted process

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ANNAPOLIS — The Board of Public Works on Wednesday approved a lucrative, 23-year contract to manage concessions at Baltimore-Washington International Thurgood Marshall Airport, choosing to keep the current contractor and capping a protracted process that began under former Republican Gov. Larry Hogan.

Gov. Wes Moore and Comptroller Brooke Lierman provided the two votes necessary for the state to award the contract to Fraport USA, formerly Airmall, which has operated concessions at BWI since 2004.

State Treasurer Dereck Davis, though, voted against the contract. He took issue with several parts of the state’s decision process and said that officials could have done more to squeeze revenue from the deal.

Moore said during Wednesday’s meeting that the new contract with Fraport will provide passengers with a range of amenities, expand opportunities for small- and minority-owned businesses and protect airport workers, including through collective bargaining rights for food and retail business employees.

The Maryland Department of Transportation will receive 90% of the revenue generated through the airport concessions program, marking a 20% increase over the percentage that the state currently receives, Moore said.

For nearly two years, Fraport has been running concessions at the airport under a month-to-month contract. That agreement came about shortly after Moore took office in 2023.

The governor canceled a controversial recommendation from the Maryland Aviation Administration to award the BWI concessions contract to New Market Development, a company founded and managed by Major Riddick Jr., who was a chief of staff for former Democratic Gov. Parris Glendening.

The MAA reportedly changed the requirements of its solicitation in ways that appeared to favor New Market Development, according to a 2023 report from Maryland Matters.

In directing the MAA to scrap its previous recommendation and begin a new procurement, Moore said that his administration would encourage “robust competition” and “fairness.”

About 27 million people fly in and out of BWI each year, according to Fraport. It’s the largest airport in the metro Washington, D.C., area and the biggest East Coast hub for Southwest Airlines.

The airport is also undergoing a major project to bridge concourses with a new A/B Connector.

The project includes 142,000 square feet in added space, nearly a third of which will be for concessions, according to the governor’s office.

The state is expected to receive more than $39 million in revenue in Fraport’s first full year of operations and management, but that won’t come until the fourth year of the contract because of developments and renovations.

In voting against the contract, Davis said the state should have given more priority to financial offers as part of the competitive bidding process.

“When we’re in a position of either making cuts to services or asking folks to pay more through revenue enhancement measures, I think there’s an obligation — if we can take some of that financial burden off the backs of the citizens, we should maximize that,” Davis said in an interview after the meeting. “I just don’t think we did that this time.”

Maryland is facing a projected $3 billion budget deficit next fiscal year, and analysts have said that the hole could grow to nearly $6 billion in the coming years.

Postponing the approval of a new contract and continuing the month-to-month agreement could have presented its own financial setbacks.

Retail, restaurant and commercial businesses that subcontract with Fraport have also been operating under month-to-month leases since 2023.

Officials were concerned that the uncertainty of continuing with short-term leases could have prompted businesses to relocate to other airports, costing the state sales tax revenue and hurting BWI’s image.

The prospect of empty concession spaces was especially risky as BWI builds its A/B Connector and expands its available food and retails area, Lierman said during Wednesday’s meeting.

“I feel strongly about making sure that we’re investing in these businesses so that they can generate the sales tax that the state really needs,” she said.