Guam Airport Responds To DFS Suit: Expects To Prevail

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Retailer accuses airport of misconduct in awarding airport contract

By Gaynor Dumat-ol Daleno

HAGÅTÑA, Guam (Pacific Daily News, Oct. 17, 2014) – A.B. Won Pat International Airport Authority General Manager Chuck Ada yesterday responded to the lawsuit filed this week against the airport by retailer DFS Guam, saying the airport will prevail.

DFS Guam, in its lawsuit filed Tuesday in the Superior Court of Guam, accuses the airport agency of being an "active participant" in alleged misconduct that led to the award of the airport duty-free retail concession contract to competitor Lotte Duty Free.

DFS took the issue to court last year, but the court rejected the lawsuit, saying DFS had not exhausted all of its administrative appeals first.

But the Office of Public Accountability rejected it as well, citing a lack of resources and time, so DFS this week filed another court case.

"The latest complaint filed in Guam Superior Court by DFS Guam ... relating to the specialty retail concession contract rehashes old accusations," the airport said yesterday in a written statement.

DFS, which had the airport's concession contract for three decades, is protesting the airport's award of the contract to Lotte. It's worth $154 million to the airport over 10 years.

DFS has alleged the selection process was tainted by gifts from Lotte.

The airport agency stated that since DFS' first attempt to stop Lotte from taking over the airport duty-free concession failed, in July 2013, Lotte has renovated and opened the airport concession space and made more than $20 million in capital improvements.

"Such improvements include much-needed renovations to airport bathrooms and the food court," the airport stated.

Lotte pays the airport agency $15.4 million in annual minimum guaranteed rent, which is more than three times as much as the minimum guaranteed rent paid by DFS when it held the concession, according to the airport agency.

"GIAA expects to prevail in the latest action ... This matter has been a distraction and has taken far longer than it should have because of all of DFS' legal maneuvering and tactics," Executive Manager Ada stated.

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