Mark Flatten

High Fliers: How Political Insiders Gained an Edge in Sky Harbor Concessions

Posted on October 13, 2009 | Type: Investigative Report | Author: Mark Flatten
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Mary Rose Wilcox eked out a small profit from a Mexican restaurant she owned in south Phoenix before she used her race and status as the owner of a “disadvantaged” business to land a lucrative concession deal at Sky Harbor International Airport.

The long-entrenched Democrat on the Maricopa County Board of Supervisors reported $10,000 in profits from her El Portal restaurant in an August 2003 financial statement. In December 2004, Wilcox was brought into a joint venture to co-own a Chili’s franchise, the only full-service bar and restaurant in the main lobby of Terminal 4.

Seven months later, Wilcox reported profits of $113,000 from the Chili’s deal alone.

Wilcox did not have to bring any money into the deal. Host International Inc., which holds the master concession contract with the City of Phoenix for all food and beverage sales in Terminal 4, fronted her company a loan for her initial capital contribution of $450,000. The loan was to be repaid through profits from the restaurant, and was made in violation of city policy.

In violation of federal rules, Wilcox did not have a role in the day-to-day operations of the franchise. That was the exclusive job of Host, according to the joint venture agreement she signed with the international mega-concession company.

Wilcox was not even required to spend any more time on the restaurant business than she deemed appropriate.

One inviolable rule for Wilcox, who is Hispanic, was that she had to maintain her status as the owner of an Airport Concession Disadvantaged Business Enterprise (ACDBE or DBE), a creation of federal law and regulations that give preferences in airport concession contracting to firms owned by minorities and women.

The DBE program is supposed to remedy current and past discrimination, and create a “level playing field” in the awarding of airport concession contracts. The DBE owner is required to take an active role in running the company, according to federal rules.

Read High Fliers here

Sidebar: Courts Curb Airport Preferences

Sidebar: Who Owns What at Sky Harbor? Who Knows?

Contact Mark Flatten at (602) 462-5000 x223 or mflatten@goldwaterinstitute.org

Analysis by Clint Bolick: Recommendations for Giving Regular Small Businesses Access to Airport Contracts

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