Local Restaurant Brands to Take Flight in New T1

It’s takeoff time for some casual dining spots based in San Diego County, including hometown favorites SIP Wine & Beer, Luna Grill and NOVO Brazil Brewery, plus a new venture from skateboard star and Carlsbad native Tony Hawk, called Novocientos Grados – A Tony Hawk Public House.

The four are among a group of food and beverage establishments, plus several retail shops, with hometown roots and local ties that have landed spots inside the San Diego International Airport (SAN) as part of the $3.4 billion expansion to Terminal 1 (T1) on the eastern side.

The San Diego County Regional Airport Authority (SDCRAA), the independent manager of the airport, earlier this month gave the green light to several concessionaires now charged with bringing the businesses to the airport. Its T1 upgrades have been in the works since November 2021, including 32,000 square feet for food and beverage services and another 14,000 square feet for retail operations.

Fifteen new concession locations are expected to open in 2025, when the airport adds 19 gates to Terminal 1, with another 10 vendors expected to open for business during the second phase of T1’s opening in 2028, when 11 more gates are coming. When the new T1 project is completed, SAN will have a total 62 gates to serve the traveling public.

Big Opportunity

That’s great news to restaurant proprietors looking for exposure because the airport already has guaranteed foot traffic, and the travel sector continues to grow. The SDCRAA says the airport served 15.6 million passengers in 2021, and from Jan. 1 through June 20, 2022, it served more than 10 million passengers  – a 72.8% increase in passenger traffic year over year.

Having a presence at the airport should also help drive future traffic to the proprietors’ brick-and-mortar locations as well.

“This is an opportunity that people wait a lifetime for,” said Cassandra Schaeg, founder of Escondido-based SIP Wine & Beer.

Schaeg said she is heartened by the SDCRAA’s adherence to the Federal Aviation Administration’s Airport Concessions Disadvantaged Business Enterprise (ACDBE) program, which is intended to help level the playing field by providing a fair opportunity for food and beverage, retail and other concessions, businesses that are owned and controlled by socially and economically disadvantaged individuals.

Part of the U.S. Department of Transportation’s General Disadvantaged Business Enterprise (DBE) Program, ACDBE has become part of SDCRAA’s plan to promote the inclusion of small, minority, local and service-disabled veteran-owned businesses as part of its contracting.

“It’s a bold move and needed stance coming from the Airport Authority, with the mission to elevate brands,” Schaeg said. “They’re saying, ‘We support people women who look like you, we support brands that are diverse.’ Now all these passengers are going to be introduced to SIP. This expansion is unheard of for a person of color, for a woman.”

Chula Vista-headquartered NOVO and Luna Grill, which has grown to 52 spots in California and Texas since first opening in 2004, are also anticipating opening locations in the airport.

“We take a lot of pride in having our restaurant in such a prominent location as the airport,” said Rich Pinnella, president of Luna Grill. “To get it into the airport also gives us brand awareness and can allow us a foray into other sites like other airports and universities.”

The dining establishments will be overseen by concessionaires approved by the SDCRAA and include Spain-based Areas San JV LLC, whose U.S. subsidiary will manage SIP, Luna Grill, Novocientos Grados, Carnitas’ Snack Shack and Mr. Moto’s Pizza.

“We want to create something special, a sense of place for San Diego,” said Carlos Bernal, CEO of Areas US. “We put in branded concepts that resonate well with folks traveling to airport and places the community can be proud of and the airport can be proud of.”

Bernal also brought in local hotelier and restaurateur Elvin Lai, who will own 25% of the Areas’ initial venture at SAN. It already has a presence at 10 airports in the U.S., including Los Angeles.

“The financial returns on this are solid for the next 15 years,” Lai said, adding he will need to raise about $5 million to start before T1 construction begins in January of 2025, and that he expects to be oversubscribed.

Other concessionaires are Paradies Lagardere@SAN LLC, which will oversee three retail operations, including a combo Gaslamp Marketplace/Hip & Humble shop; Marshall Retail Group LLC, which includes a commissary featuring USS Midway Museum-related gifts; Emerging Domestic Market Ventures Inc., which will manage Grab & Go Subs, a San Diego staple since 1973; and High Flying Foods, which will have NOVO and six other proprietors including Brian Malarkey’s Herb & Air, El Pez Kitchen and Sushi and The Taco Stand under its umbrella.

Lease agreements at the airport are based on a percentage of gross sales. For food and beverage businesses, concessionaires pay between 10 to 12%. For retail shops, 18 to 20%.