Westmoreland airport authority OKs DeNunzio’s restaurant lease

The Westmoreland County Airport Authority on Tuesday approved a new lease with DeNunzio’s Italian Chophouse for the terminal restaurant space at Arnold Palmer Regional Airport, despite a request from county Commissioner Gina Cerilli Thrasher to delay the action.

Thrasher questioned how the authority calculated the terms of the lease and asked the board to hold off on voting on the matter so it could consider suggestions she and Commissioner Doug Chew have for increasing revenue from food services at the airport in Unity.

Though DeNunzio’s existing lease doesn’t expire until next year, the new terms would take effect as soon as the document is signed by restaurant owner Ron DeNunzio. According to the authority, the approved lease is for an initial 5-year term, with two additional 5-year options to renew, and differs from a previous version DeNunzio had reviewed.

The new rate for the restaurant proper is set at $7,447.50 per month, or $89,730 per year, which includes utilities and is subject to adjustment with each renewal of the lease. DeNunzio’s also would pay $500 per month for use of a banquet room and $750 for a snack bar.

Ron DeNunzio previously told the Tribune-Review he agreed to a 100% increase from his current monthly rate of $4,000 for rent and utilities. He has been paying $500 per quarter for the banquet room.

The authority approved the new lease by a vote of 7-2, with Mark Gera and Gary Beck opposed. Gera said he wasn’t comfortable with some of the language in the agreement but declined to elaborate.

“I just wasn’t comfortable with a few things that were in the lease,” Beck said, noting he has nothing against DeNunzio’s. “I just thought it would be in the best interest of the taxpayers if it would be opened up.”

Thrasher objected to the inclusion of utilities with the restaurant rent and the authority’s assertion that the lease terms are based on a past appraised market value of between $4 and $6 per square foot. She noted the county is paying $6.50 per square foot just to rent records storage space.

Thrasher and Chew suggested the authority either take over operation of the airport snack bar as an additional source of revenue or claim 50% of the profits if the bar continues to be run by a vendor. Thrasher suggested selling bottled water alone at the snack bar had the potential to generate up to $750,000 annually for the authority.

Another alternative for maximizing revenue, the commissioners suggested, would be to charge an extra 2% facility fee on every check at the airport restaurant and every event booked in the banquet room.

Under the new lease, DeNunzio’s would no longer have exclusive rights to all food sales on the airport property.

The commissioners have repeatedly pointed out that the county annually provides about $2.7 million in taxpayer dollars for the airport authority.

“We appreciate the support that the county and the commissioners have given us,” authority Chairman Paul Puleo said. He later noted the return the airport provides on that investment. It delivers an economic impact of $226 million annually, according to a 2019 study by the state Bureau of Aviation.

“I don’t disagree that we have to try to generate as much revenue as possible,” Puleo said. But if there are things that have been good, my thinking is: Don’t change them. Let’s try to keep them and just enhance them.

He suggested the airport’s old runway could be a good site for leasing space to additional businesses, perhaps even a gas station.

Executive Director Gabe Monzo noted the authority has followed a policy of focusing on airport operations and has avoided getting involved with running the restaurant or snack bar.

“Don’t have the guys that plow runways out filling vending machines,” said authority member Ed Kilkeary, who operates LJ Aviation at the airport. “That’s not our business.”

Doug Griffin, a business executive and general aviation pilot from the Latrobe area who said he has flown from the airport for 35 years, spoke in favor of keeping DeNunzio’s as the restaurant vendor. He said the restaurant draws traffic to the airport and is rated highly among aviation industry publications and organizations.

“This airport gains national attention in a very favorable way,” Griffin said. “Let’s not mess that up.”

After the county commissioners pressured the authority in April to open the restaurant lease to competitive bids, Puleo directed the property committee to issue a request for proposals. Those who responded included the operators of Rizzo’s Malabar Inn in Crabtree and the IronRock Tap Room in Greensburg, as well as a restaurant group from Johnstown.

Committee Chairman Don Rossi said the potential lessees indicated “they would be willing to work with the airport at any cost.” But, he said, an independent consultant he turned to for advice recommended sticking with DeNunzio’s, unless the authority would be willing to make financial concessions to attract a five-star restaurant.

When Thrasher asked for specifics of the restaurant operators’ proposals, Rossi said he didn’t have that information available.

After Tuesday’s meeting, Thrasher said she believed the authority members had made up their minds about the lease in advance. She said a male authority member, whom she declined to identify, told her to “shut up and stay home,” in response to her involvement in the lease discussions.

Thrasher and Chew said the authority turned down their requests to meet with the panel to discuss the lease prior to Tuesday’s meeting.

The commissioners and authority “need to work as a team,” Chew said. “An open dialogue over the last four weeks would have gone a long way to easing tensions on both sides.”

Chew said he was pleased by some changes in the latest version of the restaurant lease, including an increase in the rent being charged. But, he said, “The absence of established bidding and purchasing processes is, at best, alarming.”

Thrasher said she and Chew “will be watching every single thing that this airport authority does going forward.

“I have lost confidence in the board, and that will be reflected when it comes time to reappoint individuals.”