Motion 2020-13 a Motion to authorize adjustments to leases and other financial terms for airport dining and retail
tenants Page 1 of 2
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MOTION 2020-13:
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A MOTION OF THE PORT OF SEATTLE COMMISSION
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to authorize adjustments to leases and other financial
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terms for airport dining and retail tenants.
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PROPOSED
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JUNE 9, 2020
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INTRODUCTION
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The COVID-19 global pandemic is an unprecedented public health emergency that impacts the
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lives of everyone in the region and state. The Port of Seattle’s top priorities during this difficult
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time are keeping employees, tenants, concessionaires, contractors, workers, customers,
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travelers and residents safe, while simultaneously strengthening our critical aviation and
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maritime infrastructure to advance trade and commerce and to support jobs, small and diverse
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businesses, and environmental sustainability.
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At Seattle-Tacoma International Airport (SEA), a sustainable base of dining and retail (ADR)
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tenants is essential to the Port’s overall budget and the passenger experience that the airport
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needs to provide in order to attract travelers. However, drastic reductions in air travel combined
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with Washington state’s Stay Home, Stay Healthy order that limits dining and retail operations
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have put the financial futures of ADR businesses at risk. Loss of these businesses would not only
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impact the Port’s budget in short-term lost revenue but also result in significant cost of replacing
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these businesses – such as procurement and build-out costs for new tenants.
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Therefore, the Commission believes strongly that it is in the best interest of the Port and the
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financial sustainability of SEA to provide adjustments to ADR tenant leases and other financial
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terms to support the short and long-term viability of SEA’s ADR program and all of its ADR
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tenants. These immediate decisions will provide certainty to the Port’s partners and support
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regional economic recovery. The Commission and the Executive Director will continue to evaluate
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and adjust this approach as new information becomes available.
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TEXT OF THE MOTION
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The Port of Seattle Commission hereby provides the following direction to Port leadership:
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1) The Commission authorizes the Executive Director to extend the leases of current ADR
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tenants by three years, with the exception of ADR kiosk tenants who will receive one
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additional year of term.
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Item Number: _8a_
Meeting Date: June 9, 2020
Motion 2020-13 a Motion to authorize adjustments to leases and other financial terms for airport dining and retail
tenants Page 2 of 2
2) The Commission authorizes the Executive Director to temporarily suspend the Minimum
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Annual Guarantee (MAG) for ADR tenants through the end of 2020. The Port will revisit
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the MAG prior to the end of 2020 and will decide how MAG will be handled in 2021.
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STATEMENT IN SUPPORT OF THE MOTION
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The Port Commission’s actions on April 1, 2020 authorized short-term economic relief to
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airlines, concessionaires and tenants operating at Seattle-Tacoma International Airport to
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address impacts of the health and economic crisis resulting from the COVID-19 pandemic.
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The Commission also authorized the Executive Director to approve further relief depending on
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the economic conditions facing businesses on airport and non-airport Port properties. On April
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24 and May 12, the Executive Director granted further assistance for airlines, the airport dining
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and retail (ADR) concessionaires and certain other businesses at the airport. However, in
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recognition of the significant challenges faced by ADR tenants (both lack of customers and
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state-imposed restrictions), airport staff continued consideration and analysis of potential
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financial relief for SEA’s ADR businesses, including discussions about further financial relief with
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representatives of the Small Business Airport Action Committee (SBAAC), which represents a
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number of women-owned and minority ADR businesses.
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The proposed changes to ensure the financial sustainability of these tenants are justified by the
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Port’s strong interest in taking actions to preserve those businesses in order to serve travelers
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when the economy recovers. These lease and financial term changes will provide a greater
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opportunity for ADR tenants to offset losses from the COVID-19 economic impacts and will
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substantially benefit the Port by promoting ADR tenant financial stability during the COVID-19
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emergency, postponing through lease extensions the need to incur the substantial costs of
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procuring new tenants and leases for ADR spaces, and supporting the long-term viability of the
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ADR program and its readiness to ramp-up as soon as possible once passenger enplanements
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begin to return to normal levels.
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