The uproar over the forthcoming billion-dollar makeover at Denver International Airport, including a new hotel and train station, has focused largely on the price tag and the potential hike in air fares that the ambitious expansion might trigger. But the operator of one of the oldest concessions at DIA says the new direction is putting the squeeze on small businesses, too.
And the city could lose hundreds of thousands of dollars in revenue and unpaid loans if that operator goes bust.
Auntie Anne's Soft Pretzels operates out of two locations at DIA -- in the terminal and on Concourse B. But a marked drop in traffic in recent years and other problems with the franchisee's parent company, a nonprofit that employs people with disabilities, has left the operation in bankruptcy and owing $130,000 in back lease payments to the city.
Robert Smith, president of the parent company, Platte River Industries, says he's tried to meet with aviation director Kim Day about a proposal that would erase the debt and keep the pretzel concessions at DIA running, to no avail.
"We've had no communication with them whatsoever," he says. "They don't want to negotiate with us."
Smith's company currently operates on a month-to-month lease in the terminal; the Concourse B lease is up next October. It's his understanding that DIA's planners want to clear many of the small concessionaires out of Concourse B in the coming months.
"Their master plan is to take all of us out of there and put an Italian restaurant in that area," he says. "None of us have figured out what sense that made. Originally, it was going to be a sushi bar, which was even more ridiculous."
Business has been slack on the concourse since United Airlines failed to proceed with a planned expansion of gates there because of the recession; even an increased presence from US Air and Continental has failed to revive sales figures, Smith says. Platte River Industries filed for bankruptcy earlier this year because of the loss of sales at DIA and cash flow issues related to other government contracts.
Smith's proposal to rescue the franchises involves bringing in other investors who could pay the debt and keep the stores open -- and his mostly developmentally disabled staff working. But the investors would need a lease extension of at least two years to recover their outlay, he says, and DIA management is apparently reluctant to grant such terms with so many other changes in the pipeline.
He's complained to the Denver City Council, he adds, about the intransigence, including some members who were involved in the approval of a $250,000 economic development loan to Platte River Industries that's also at risk now. "The city's feedback is that they have no control over the airport," he says. "We're talking about jeopardizing $400,000 of the city's money, which is a significant amount in these times."
DIA spokeswoman Laura Coale says the airport prefers to deal with the Auntie Anne problem in bankruptcy court: "Their proposal is going to be discussed in the bankruptcy court proceedings. At this time we don't have anything determined about those particular stores."
And the Italian restaurant on Concourse B? "Nothing's been decided," Coale says.
Smith wants to see more transparency in the planning process. He notes that even if new concessions are being planned, there could be a lag time of years between the shuttering of mom-and-pop operations and the arrival of tony new venues. One shop next to the Auntie Anne's in the terminal has been vacant for two years, a revenue stream gone dry.
"It's not good to have empty spaces in the airport," he says.
For more on the big changes envisioned by Day for DIA, see my feature "Flight Change."