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