Los Angeles Int’l Achieves Diversity Milestone in Concessions Ownership

Los Angeles Int’l Achieves Diversity Milestone in Concessions Ownership
Author: 
Nicole Nelson
Published in: 
July-August
2022

When COVID-19 arrived Stateside and discretionary air travel all but stopped, concessionaires in U.S. airports switched to retrenchment mode. Their logic was understandable: no passengers, no revenue. With the terminals eerily devoid of traffic, operators shuttered their food counters and retail shops and read the fine print of their leases.

As concessions executives scrambled to pull out of the market, Greg Plummer of Enjoy Repeat decided to go all in. At the time, his company was the disadvantaged business enterprise partner in a standard joint venture agreement with SSP America at Los Angeles International Airport (LAX). Together, the joint venture partners operated eight food and beverage outlets for Unibail-Rodamco-Westfield Airports, the prime commercial developer and manager at LAX.

After what appeared to be a counterintuitive move amid the economic tornado of COVID, Plummer is now the chief executive officer and managing partner of the only current disadvantaged business enterprise to own an entire portfolio of a major food and beverage concessions at LAX.

facts&figures

Project: Increasing Concessions Ownership by Disadvantaged Business Enterprises

Location: Los Angeles Int’l Airport

Airport Authority: Los Angeles World Airports

Concessions Involved: Terminals 1 & 6

Prime Operator: Concord Collective

Commercial Developer & Manager: Unibail-Rodamco-Westfield Airports

Terminal 1 Concepts: Panda Express; Einstein Bros. Bagels; Chick-fil-A; Ace Cervecería & Tacos; Betcha Burger; Qwench; Wetzel’s Pretzels

Terminal 6 Concept: Peet’s Coffee

Concord Employees: 140

How it Happened

During the early days of the pandemic in Spring 2020, Enjoy Repeat’s majority business partner of three years, SSP America, began planning a full exit from LAX. “The pandemic hit and really took the wind out of our sails,” recalls Plummer.

But when SSP approached Plummer about selling his 25% stake in the joint venture, Plummer immediately declined.

And then promptly flipped the script.

Acting on gut instinct, Plummer asked for the opportunity to buy out his 75% majority partner. “Having worked most of my adult career in other airports and LAX, I knew I loved this airport,” he explains. “I believed business would eventually come back, and I didn’t really even think about it. I just kind of reacted.”

Enjoy Repeat and SSP agreed in short order to work toward Plummer’s goal of achieving full ownership of their previously shared portfolio. Next, Plummer called on Unibail-Rodamco-Westfield Airports to lobby for its support of the brewing transaction.

Mike Salzman, group director of Unibail-Rodamco-Westfield Airports, reports that the proposal from Plummer quickly received the corporation’s full support. “This transaction is really emblematic of URW’s approach to inclusion,” he explains.

On a personal level, Salzman was pleased to watch Plummer evolve from a 25% joint venture partner to the 100% owner in a historic transaction—the first airport concessions disadvantaged business enterprise (ACDBE) to take over the entire portfolio of a major food and beverage concession operator within the industry.

“We are certainly supportive of all manners of inclusion, but most notably we want to see principals—owner/operators of small businesses—participating in the airport,” Salzman explains. As the prime commercial developer and manager at LAX, the company works to bring together a diverse mix of concepts and business owners, he adds.

 “What we saw in this deal was a prime opportunity for Greg [Plummer] to emerge from a minority investor to an owner/operator,” Salzman continues. “We knew it was going to be an amazing success story that was perfectly aligned with our vision of how we would like to see the terminals that we operate be executed.”

He notes that Unibail-Rodamco-Westfield Airports supported Plummer’s move by being flexible about timelines, receivables and specific financial obligations. 

“We saw this as a very important deal,” Salzman emphasizes, noting the unique aspect of a large prime operator being bought out by its ACDBE partner. “It is an amazing success story because you often see it the other way, where ACDBEs get bought out by the prime. That is what got our attention. And then it was just a matter of working with Greg [Plummer], SSP and LAWA [Los Angeles World Airports] to get the deal done.”

Airport Backing

As the airport’s owner and operator, LAWA was fully onboard. LAWA Chief Executive Officer Justin Erbacci reports that the authority did everything it could to make the transition seamless as Enjoy Repeat took over SSP’s assets at LAX.

“We have a very concerted effort to try to increase the participation of ACDBEs at our airport,” Erbacci says, adding that increasing participation of disadvantaged business enterprises across all business facets at LAX is important.

To that end, LAWA has an internal ACDBE working group that partners with the Airport Minority Advisory Council (AMAC) and the Urban League.

“We have a lot of groups that are participating in this effort to try to identify how we, as an airport, can increase the participation of ACDBEs,” Erbacci continues. “We are trying to provide some assistance to help them to be more successful.”

One tool LAWA uses is gap analyses to better understand and target the challenges that disadvantaged business enterprises encounter when trying to conduct business at LAX.

The airports authority also established an internal mentorship program led by successful ACDBE executives such as Plummer.

Erbacci knows Plummer’s story well and recites it by heart: After graduating from Morehouse College, Plummer began his career in restaurant management at LAX in 2005. He spent a dozen years working for CMS Hospitality, a minority owned and operated business, before starting his own company in 2016: Enjoy Repeat, a certified ACDBE and minority joint venture partner of SSP America. After successfully negotiating the agreement to acquire SSP’s assets at LAX in 2020, Plummer assembled a team of minority and women partners to form Concord Collective. Currently, Concord employs 140 people working in Terminal 1 and Terminal 6.

Erbacci lauds Plummer’s long history of ACDBE leadership at LAX, and acknowledges the many obstacles he has overcome.

“One of the biggest issues for ACDBEs is raising the capital that is necessary to make the one-time investment they need to put a concession in place,” Erbacci says. “We are looking at different opportunities for us to be able to provide some more assistance there as well.”

In the case of Concord Collective, Erbacci says that LAWA worked with Unibail-Rodamco-Westfield Airports to do whatever it could to facilitate the historic concessions purchase.

Plummer notes that he is grateful for the outpouring of support he has received from LAWA.

“The Board was very supportive in really walking us through the process,” he remarks.

Sealing the Deal

In April 2020, Plummer brought in equity partners to help secure the business and finalize the transaction.

“That was a really difficult process during what was probably the worst economic downturn in aviation history,” Plummer reflects. “That was a really challenging part, but then the real work started once the deal was finalized.”

In order to make the venture more profitable, LAWA allowed Concord to re-conceptualize the portfolio it inherited from the joint venture with SSP.

“Greg [Plummer] came up with some very innovative concepts,” Erbacci says. “He added some national brand names such as Panda Express, and also brought some innovative concepts of his own to the table, like the affordable Betcha Burger.”

Historically, concessions operators have done very well at LAX, and Concord Collective is well positioned to follow suit, he adds.

In late May, Erbacci reported that the domestic terminals at LAX were back to 75% of their pre-pandemic passenger levels, and he expected volume to increase even more after Memorial Day.

“As our international traffic starts to come back, we will be getting closer to our pre-pandemic numbers, and the concessions are starting to do very well there,” he adds. “If they are not already profitable, they will be very soon.”

Plummer readily acknowledges that operating concessions at LAX requires more nuance, and capital, than operating traditional streetside restaurants. But he also firmly believes that the Concord Collective model is going to pay off.

“Right now, the ecosystem is still recovering,” says Plummer.

Looking forward, he is optimistic about the current recovery in the airport sector yet cautious about ongoing challenges associated with labor shortages and inflation. “In the long term, we believe it is going to be a very successful business,” says Plummer. “We are really just enjoying the ride, because that is what it is: a ride. We are having a lot of fun building something that will stand the test of time—something that I am proud of.”

Subcategory: 
Concessions/Retail

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