NAD revises coffee vendor request

By VERNON CLEMENT JONES, Guardian Business Editor, vernon@nasguard.com

The new manager of Lynden Pindling International has now backed off onerous prerequisites for Bahamian businesses looking to win two specialty coffee concessions in the airport.

The change comes within days of a Guardian Business article outlining the concerns of would-be applicants, worried that an initial offer for bids appeared to discourage all but one coffee franchise from applying.

Late last month, the Nassau Airport Development Company (NAD) began trolling for proposal submissions from companies looking to lease space set aside for two "branded specialty coffee outlets". An advertisement spelled out the must-haves for those bidders: "Proponents must be incorporated; must have at least two current locations similar to the proposed operation at (Lynden Pindling International) where the proponents has operated similar branded specialty coffee facilities with the last three consecutive years; (and) at least two of the proponent's current locations must have generated at least $500,000 in average annual gross sales in the last two years."

The last requisite, in particular, sparked the concern of Jonathan Mitchell, the operations manager for Mister Donut. Even as the second largest franchise operation specializing in branded coffee in The Bahamas, the company's sales fall short of that $500k threshold.

"Those requirements appear to knock everybody Bahamian out of the running," he told Guardian Business in April. "That's with the possible exception of Starbucks."

Neither the mega-chain nor NAD would provide comment.

In a newly revised, 34-page proposal request, the airport manager has now removed any explicit reference to past sales figures or history in the coffee biz. Still, Mitchell has other concerns centered on rent and capital outlay.

For the smallest of the two concessions — 600 sq. ft. in the International terminal — NAD is demanding a minimum annual rent of $30,000 per annum or 12 percent of gross revenue, whichever is greater. Rent for the larger location, in the U.S. departure lounge, has been set up along the same lines, with a $90k floor. But Mitchell points to NAD's $250,000 start-up-costs projection and the requirement tenants relocate the concessions at their own expense once airport redevelopment is complete as possible barriers to most Bahamian businesses.

"You're asking someone to invest $250,000 into a location that they will then have to move in 2 1/2 years or in four or five years," he told Guardian Business Friday. "Those costs could make it not worthwhile for many Bahamians.

That doesn't appear to be NAD's thinking. It's pegging passenger traffic, both domestic and foreign, at four million-plus by 2012. At least one analyst suggests the number may be rosier than the current downturn in the tourism market in fact supports.

It's one of many questions bidders will take up for themselves before submitting proposals on or before June 18 at 3 p.m.

Coffee drinking is something of a new phenomenon for Bahamians, more accustomed to teetotaling — sorry, tea-drinking.

It's only over the last year that they've begun to follow the lead of their coffee-clutching American counterparts, a recent development evidenced by a dearth of coffee bars in this country compared to any U.S. city.

That fundamental difference suggested the conditions spelled out in NAD's earlier bid request were simply out of step with the local business environment and the infancy of its coffee industry.

Under the terms of its new offer document, the management company says it will evaluate each of those bids using a point system. It's one focused on an applicant's past experience, concept ideas and financial capacity, among other factors.

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