The city of Atlanta is moving toward a legal settlement with a minority partner in an airport spa contract.
The Atlanta City Council's finance committee this week voted unanimously to approve new leases with XpresSpa on Concourses A and C. The ordinance is also subject to approval by the full city council.
The move comes after the Federal Aviation Administration said the city of Atlanta was in violation of its obligations for airport grants because of its actions in the dispute.
Such violations can put the airport’s eligibility for federal grant funding at risk.
XpresSpa's partnership with minority contractor Cordial Endeavor Concessionss helped XpresSpa fulfill federal requirements for minority participation to operate concessions at the airport, but the two companies have been in conflict since 2013.
XpresSpa moved to find another partner, and Cordial managing partner Shelia Edwards cried foul. Cordial has been shut out of the business by XpresSpa since 2014.
That led to multiple lawsuits and a civil rights complaint filed with the Federal Aviation Administration by Cordial against the city for not enforcing the terms of the joint venture between XpresSpa and Cordial.
XpresSpa already operates on Concourses A and C, but it opened those locations in 2009 under contracts that were originally for terms of up to ten years.
The proposed ordinance would allow the city to give new five-year contracts to XpresSpa and calls for XpresSpa to partner with the ousted minority contractor, which is not named in the legislation.
In order to strike the new lease agreements with XpresSpa Atlanta Terminal A LLC and XpresSpa Atlanta Terminal C LLC, the city must waive procurement code which typically requires putting contracts out for bid or allowing companies to compete for the contract.
That means other spa operators that might want to open locations at Hartsfield-Jackson would not be able to compete for the contracts granted to XpresSpa.
Atlanta city attorney Nina Hickson and the mayor’s office declined to comment on the legislation.
Atlanta city council member Andre Dickens said there will be other opportunities for concessionaires with the closure of the airport smoking rooms, which could be converted to new concessions locations.
Language in the proposed ordinance says the city recognizes that waiving the procurement code and executing the new concessiones leases "is an extraordinarily(sic) step."
The ordinance says the city consulted with the FAA and that the agency agrees that the concessions lease agreements “will satisfy and resolve claims alleged against the City” by the minority contractor.
The details of the partnership between XpresSpa and its minority partner under the settlement are yet to be seen.
The ordinance also says that the parties agree that once the settlement is finalized, they will petition the courts to dismiss all pending litigation.
Since the dispute between XpresSpa and Cordial began, XpresSpa has been acquired by new owners. Additionally, the city's former chief procurement officer and head of contract compliance overseeing minority contracting have pleaded guilty in a federal investigation of corruption at Atlanta City Hall, and the city has a new mayor.
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