by Matt Rosenberg October 8th, 2013
Port of Seattle Sea-Tac Airport concession operator HMS Host owes the port $635,704 in unpaid fees, interest and a late fee, according to a recently released port internal audit. The problem arose because HMS Host subtenants The Great American Bagel Bakery and Diva Espresso were misclassified as “branded food” concessionaires who get a discount of about two percent in the share of revenues they must fork over to the airport for the privilege of operating there. Port managers of airport concessions and business development said in the audit they hadn’t been aware of the current problem. But they added they’d seek “appropriate” recovery of funds owed by HMS Host, and would keep closer tabs on branded food sales by concessionaires and related rates of concession payments to the port.
Over 2009, 2010 and 2011 concession fees to the port from HMS Host main terminal subtenants, two Great American Bagel Bakery locations and a Diva Espresso, were underpaid by a total of $395,100. With accrued interest and a small late fee, the total owed to the port by HMS Host is $635,704, says the port’s internal audit team in the report to management. The report was shared last week at a meeting of the port’s internal audit committee, made up of elected port board commissioners.
To qualify as a “branded food” enterprise and get the two percent concession fee discount, operators have to pay the brand franchisor no less than three percent of their gross sales receipts, but that was not actually happening in these instances, port auditors noted.
In an earlier report covering 2006-07, inside auditors also accented lax oversight by the port over the branded food concession rate, the new report states.
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HMS Host is a unit of the mammoth global conglomerate Autogrill, which operates food facilities for travelers at transportation and shopping sites across Europe, North America, Australia and parts of Asia.