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NEWS Last modified on July 29, 2011

Westfield wins 20–year contract at Chicago O’Hare

After months of negotiations Chicago City Council has awarded the 20–year concessions contract at O’Hare International Airport’s Terminal 5 to Westfield Concessions.

After months of negotiations Chicago City Council has awarded the 20–year concessions contract at O’Hare International Airport’s Terminal 5 to Westfield Concessions.


The agreement allows for a complete redevelopment of the concessions at Chicago O’Hare International’s Terminal 5 including the development of new food and beverage, news and gifts, specialty retail, and duty-free locations.


Chicago’s Mayor Emanuel, said: “Westfield’s proposal for the redevelopment of the Terminal 5 concessions programme is the best deal for the city’s taxpayers.


“This agreement will bring 280 new jobs to Chicago and improve the travel experience of Chicagoans and visitors from around the world who fly through O'Hare International Airport.”


As part of a 20-year contract, Westfield will redevelop and manage the concessions at Terminal 5, while the City retains full ownership of the terminal and has the opportunity to terminate the agreement after 10 years, for any reason.


Westfield and its operators will invest around $26 million in the project.


Meanwhile, the redevelopment of Terminal 5 will also include relocating the security checkpoints to open up prime concession space as well as building several new concession spaces within the airside part of the terminal.


In total there will be over 25 concession spaces.


Westfield will pay the Chicago Department of Aviation (CDA) annual rent relative to the revenue generated at Terminal 5 each year.


This will be either be $3.00 per actual international enplanement from Terminal 5 in the prior calendar year or a percentage rent of 16% of gross sales, whichever is greater.


Chicago O’Hare’s International Terminal 5 was built in 1993. Since then the concessions contract has been held by Chicago Aviation Partners (CAP), which was initially awarded a 10-year contract. After that Terminal 5 has been operating on a month-by-month contract, costing the city millions in lost revenue.


However, according to the CDA, during these first 10 years alone, CAP lost the City $39 million.


The CDA said: “In 1993, Chicago Aviation Partners (CAP) was awarded a 10-year agreement to manage the concessions at Terminal 5.


“As part of the award of that agreement, CAP projected it would pay the City $67 million in rent over the 10-year term of the agreement.  In actuality, CAP only paid the City $28 million during that period, thus creating a shortfall of $39 million from their projected rent payments.”


In the new agreement with Westfield, the CDA will receive rent of $200,000 more than what CAP is currently paying.


Commissioner Rosemarie Andolino at the CDA, said: "Based on the capital investment, the rent to be paid to the airport and Westfield's experience and qualifications, the selection of Westfield represents the best deal for the City of Chicago.”

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