TemplaterevisedJanuary10,2019.

COMMISSION

AGENDAMEMORANDUM ItemNo. 10a

ACTIONITEM DateofMeeting September24,2024



DATE: August12,2024

TO: StephenP.Metruck,ExecutiveDirector

FROM: JeffreyWolf,Director,AviationCommercialManagement

 KhaliaMoore,AssistantDirector,AirportDiningandRetail

SUBJECT: AirportDiningandRetailTenant MarketingFundContractExecutionandFunding

AuthorizationRequest



Amount of this

request:

PortFundingApproval:Upto$6,500,000overten(10)years

TenantMarketingFundApproval:Upto$29,500,000overten(10)years



ACTIONREQUESTED

RequestCommissionauthorizationfortheExecutiveDirector:

1) to execute multiple contractsoverthe next ten (10)yearsall in support oftheAirport

DiningandRetail(ADR)programincluding:

o In‐TerminalEntertainmentandCulturalConnectionActivations

o SoundsofSEAMusicProgram

o MarketingandAdvertising

o MobileOrderingPlatformalongwiththeassociatedhardware,and,

o ConcessionaireSupplementalExpenditures/Contractsoverthenextten(10)years

2) toapprovefundingfortheabove‐mentionedcontractsfromthecombinationoftheADR

TenantMarketingFund(TMF)andPortfundingthroughtheAirportDevelopmentFund

(ADF).



EXECUTIVESUMMARY

This authorization request is for the procurement and execution of a variety of contracts

necessarytosupportADRtenant‐approvedmarketingeffortsthatpromoteoverallADRtenant

awareness.ThemarketingeffortsalsoincreasecustomerengagementwiththeADRprogram

andenhancethecustomerexperiencethroughin‐terminalactivationsthatincreasedwelltime

andpromotespendingwithin theADRprogram.Ofthe variouscontractswithinthisrequest,

mostarefundedsolelybytheADRTMF.OnlyTheMusicProgramisasharedcostbyboththe



COMMISSIONAGENDA–ActionItemNo.10a Page2of7

MeetingDate:September24,2024

TemplaterevisedJune27,2019(DiversityinContracting).



Port and the ADR Tenants. However, with potential approval of a proposed budget request

withintheupcoming2025Portbudgetprocess,Port‐fundingmaysupplementtheTMFrelated

toIn‐TerminalEntertainmentandCulturalConnectionActivationsbeginningnextyear(2025).

ThesecontractsarecriticalcomponentstothecontinuedsuccessoftheADRProgramandits

tenants.Authoritytospendtenantmarketingfundsisalreadycontainedbothintheapproval

ofADRtenants’leasesandintheannualtenantmarketingoperatingbudget,whichisreviewed

andauthorizedannuallybytheADRtenants.

Contractsassociatedwiththisrequestincludethefollowing:

1) In‐TerminalEntertainmentandCulturalConnectionActivations:the creationoftargeted

eventsthathighlighttenantofferings,culturalcelebrationsrepresentingtheemployees,

airportandPNWmix,withtheintentofincreasingdwelltimewithintheterminaland

promotingADRspendingbypassengers.Thisisanexpansionoftheinitiallylaunched

programestablishedsolelybytheADRtenants.



2) Sounds of SEA Music Program: growing the established award‐winning program that

furtherenhancesthePNWsenseofplaceatSEA.



3) Marketing and Advertising: marketing of the ADR program externally and on the in‐

terminal advertising channels as requested by the ADR tenants. This may include

seasonalcampaignsandtargetedmarketingeffortstoincreaseprogramawareness.



4) MobileOrderingPlatform:reassessandimplementanewmobileorderingplatformwith

thepotentialforproductdeliverythroughouttheairport.



5) Concessionaire Supplemental Expenditures/Contracts: the high volume and ever‐

changing nature of the ADR business requires the ability to undertake short‐term

projectstorespondtotenants’needs.Theseprojectsaretypicallydesignedtoaddress

specificADRprogramobjectives/needssuchasphotography,videography,equipment

rentalforspecialeventsormaintenanceofthedigitaldirectories.Thiscontractallows

forthepurchaseofgoodsandservicesfortheseimpromptuneeds.



JUSTIFICATION

Theapprovalofthisauthorizationrequestwillallowforthecontinuationofcontractsthathave

beenessentialtoADRtenantsandthecontinuedsuccessoftheoverallprogram.

Thesecontractsandassociatedservicesenhance thetravelerandoverallcustomerexperience

atSEA,provideasenseofplace,highlightADRtenantofferings,increasenon‐aeron auticalrev enue, 

further diversity, equity, and inclusion efforts and provide employment  and business growth

opportunities.



COMMISSIONAGENDA–ActionItemNo.10a Page3of7

MeetingDate:September24,2024

TemplaterevisedJune27,2019(DiversityinContracting).



DiversityinContracting

ADR staff works with the Port’s Diversity and Contracting Department as well as CPO and

membersoftheADRTenantMarketingCommitteeonmaximizingWomenandMinorityBusiness

Enterprise(WMBE)participationoncontractswithintheADRTMFwheneverapplicable.Manyof

thecurrentestablishedcontracts are held by WMBEfirms, including the Sounds of SEA Music

ProgramandIn‐TerminalActivationandCulturalConnections.



DETAILS

HowtheADRTenantMarketingProgramWorks:



In2005,thePortandtheADRtenantsestablishedajointmarketingprogramforthepurposeof

promotingthe quality andvariety of productsandservicesavailable from thenewdining and

retail tenants. ADRtenant marketingprograms such as thishavebecome standard practice in

airportsacrossthecountry.



ThetenantmarketingprogramatSEAispaidforbytheADRtenantsasperthetermsoftheLease

andConcessionsagreement.EachNon‐Incubator Locationcontributes0.5%ofgrossmonthly

salesperunit,butnomorethan$30,000annually.IntermediateIncubatorLocationscontribute

0.25% of gross monthly sales but no more than $15,000 annually and Introductory Incubator

Locationscontributeaone‐timefeeof$250intotheTMF.AnnualcontributionsbyADR tenants

into the TMF range from approximately $2M to $3M per year and will fluctuate with various

openingsandclosingsofconceptsthroughouttheairport.Themarketingprogramrevenuesand

expenditures are managed by the ADR staff within  the Aviation Commercial Management

Department.Allocationsofthetenantmarkingfundsarereviewedduringregularmeetingswith

the ADR Tenant  Marketing Committee. This committee  is open to all ADR  tenants and meets

annually with the ADR staff to review the proposed annual spend for the next year including

marketing and branding expenditures, review marketing presentations from the current year

activations,anddiscussADRtenantrecommendationsformarketingeffortsinthenewyear.



ContractDuration/Amounts/Funding



In‐TerminalEntertainmentandCulturalConnectionActivations

 Contractduration:uptoten(10)yearsauthorized,withindividualcontractsuptofive

(5)years.

 Contractvalue:upto$600,000annually.

 ContractopportunityforWMBE/SmallBusinessparticipation.

 Thereisa2025budgetrequesttosharethecontractcostbetweenthePortandthe

ADRTenantMarketingFund.

 Funding: currently 100% from the TMF (see note above regarding potential future

Portsharedfunding)



COMMISSIONAGENDA–ActionItemNo.10a Page4of7

MeetingDate:September24,2024

TemplaterevisedJune27,2019(DiversityinContracting).



SoundsofSEAMusicProgram

 Contractduration:uptoten(10)yearsauthorized,withindividualcontractsuptofive

(5)years.

 Contractvalue:upto$700,000annually.

 Funding:sharedcostwith50%fundedbyADRTMF(upto$350,000peryear)and50%

bythePort(upto$350,000peryear).



MarketingandAdvertising

 Contractduration:uptoten(10)yearsauthorized,withmostindividualcontracts1‐2

years.

 Contractvalue:Upto$1,250,000annually.

 ADR staff will administer the contract and will work with ADR Tenant Marketing

Committee,ADRMarketingConsultant,andotherPortstaff(asneeded)formarketing

andadvertisingcampaigncreations.

 Funding:100%fromtheTMF.



MobileOrderingPlatform

 Contractduration:uptoten(10)yearsauthorized,withindividualcontractsuptotwo

(2) years with a one (1) year option. Limited duration as technology continues to 

develop.

 Contractvalue:upto$300,000annually.

 Asthistechnologycontinuestoevolve,thecontractvaluewillbedeterminedbased

on the capacity of the platform selected.  Examples of platform capability items

include software integration capability, fee structures costs, secondary services,

servicefees,platformintegrationwithdining,retail,services,etc.

 ContractopportunityforWMBE/SmallBusinessparticipation.

 Funding:100%fromtheTMF.



ConcessionaireSupplementalExpenditures/Contracts

 Contractduration:uptoten(10)yearsauthorized,withmostcontractsestablishedas

limited term purchase orders/contracts for goods and services (typically one‐time

purchasesandnotextendedlengthcontracts).

 Contractvalue:Upto$750,000annually.

 ContractopportunityforWMBE/SmallBusinessparticipation.

 Funding:100%fromTMF.



COMMISSIONAGENDA–ActionItemNo.10a Page5of7

MeetingDate:September24,2024

TemplaterevisedJune27,2019(DiversityinContracting).



ContractFundingSummary



Contracts AmountFundedbytheTMF

(10‐years)

AmountFundedbythePort

(10‐years)

In‐TerminalEntertainment/

CulturalConnections

Upto$3,000,000(2025BudgetRequest)

Upto$3,000,000

SoundsofSEAMusicProgram



Upto$3,500,000Upto$3,500,000

MarketingandAdvertising Upto$12,500,000 N/A

MobileOrderingPlatformUpto$3,000,000 N/A

ConcessionaireSupplemental

Expenditures/Contracts

Upto$7,500,000 N/A

TOTAL Upto$29,500,000overten(10)

years

Upto$6,500,000overten

(10)years



ALTERNATIVESANDIMPLICATIONSCONSIDERED

Alternative 1 – Do not approve this action and do not proceed with any of the requested

contracts.

Cost Implications: TherewouldbenoadditionalfundingneededfromthePortortheTMF

withthediscontinuationofmarketingcontracts.

Pros:

(1) The Port would not spend its own funds associated with contracts within this

request(i.e.AirportMusicProgramandpotentiallytheIn‐TerminalEntertainment

andCulturalConnectionActivations).

Cons:

(1) The ADR tenants have shared positive feedback on the use of the funds for their

marketingeffortsassociatedwiththeirspacesandtheoverallprogram.Thisoption

wouldleadtodissatisfactionbytheADRtenants.

(2) Thisoptionwouldnolongerensurea well‐coordinated,holistic marketing effort

fortheprogramandtheADRtenantswouldneedtosourcemarketingindividually.

(3) Thisoptionwouldlimitthe visibility of smallerbusinesseswithintheADRprogram

that do not have the collectivebuyingpowerforlargescalemarketingcompared

tothelargerbusinesses.

(4) AsmanyofthecontractsheldbytheADRTMFareWMBEBusinesses,therewould

be decrease in direct contracting with WMBE companies with the Port within

Aviation.

(5) IfthePortwouldliketocontinuewiththeseservices,includingprogrammingmusic

withSoundsofSEA,fullcostswouldneedtobeabsorbedwithinthePort’sbudget.



Thisisnottherecommendedalternative.

COMMISSIONAGENDA–ActionItemNo.10a Page6of7

MeetingDate:September24,2024

TemplaterevisedJune27,2019(DiversityinContracting).



Alternative2–ApproveonlyTMFfundedcontractsan dfundingand noPortfunding .

Cost Implications: Upto$29,500,000fromtheTMF,$0fromPortfunds

Pros:

(1) ThePortwouldnotspenditsownfundsassociatedwithcontractswithinthisrequest

(i.e.‐AirportMusicProgramandpotentiallytheIn‐TerminalEntertainmentand

CulturalConnectionActivations).

(2) TheADRtenantswouldmaintainmostmarketingeffortssolelyutilizingtheTMF.

Cons:

(1) TheADRtenantshaveexpressedconcernaboutsolelyfundingallmarketingefforts

(noPortfunding).

(2) ThePortwouldnolongerbeco‐fundingTheMusicProgramandpotentiallytheIn‐

TerminalActivations(assumingbudgetapprovalin2025)andthefuturecontinuity

oftheseprogramswouldbejeopardized.

(3) ThePorthaspartneredwiththeADRtenantswithfunding effortsinthepastand 

thisoptionwouldendtheco‐fundingandimpactthesynergyandgoodwillcurrently

existingbetweenthetwoparties.

Thisisnottherecommendedalternative.

Alternative3–Moveforwardwiththerecommendedaction.

CostImplications: Upto$6,500,000overten(10)yearsfromtheAirportDevelopmentFund

andupto$29,500,000millionoverten(10)yearsfromtheTMF.

Pros:

(1) Theseprogramshavebecomekeyelementsofanoverallpositivetravelerexperience

withintheAirportandaspartoftheoverallADRprogram.

(2) Continuingwiththemarketingeffortshelpsfurthergrownon‐aeronauticalrevenue

byincreasingdwelltimeandspendingthroughouttheterminal.

(3) TheprogramfostersaPacificNorthwestsenseofplacewithinSEAandcontributesto

anover allpositiveexperienceatSEAaswellashelpingtoachieve4‐and5‐starSkytrax

ratings.

(4) MostofthemarketingcontractsallowforWMBEparticipation.

Cons:

(1) There is a continued cost to the Port for the co‐sponsorship of various contracts

withinthemarketingprogram.

Thisistherecommendedalternative.



COMMISSIONAGENDA–ActionItemNo.10a Page7of7

MeetingDate:September24,2024

TemplaterevisedJune27,2019(DiversityinContracting).



ATTACHMENTSTOTHISREQUEST



(1) Presentationslides



PREVIOUSCOMMISSIONACTIONSORBRIEFINGS



(1) December 13, 2022‐ Commission authorized Determination that a Competitive

ExemptionisAppropriatefromProcurementActivities,IncludingPurchasingandServices,

relatedtotheAdvertisingServicesAssociatedwiththeAirportDiningandRetailTenants

UndertheAirportDiningandRetail(ADR)TenantMarketingFund,foraPeriodofNot‐to‐

ExceedTenYears.



(2) September 19, 2019‐ The Commission authorized Executive Director to execute

multiplecontractsfor:(1)Marketingandadvertising;(2)In‐TerminalEntertainment;

(3)MusicProgram;(4)mobile orderinganddeliverysoftwareapplicationsalongwith

theassociatedhardware;(5)qualityassurance/customerservice;allinsupportofthe

AirportDiningandRetailProgram,and(6)ConcessionaireAdHocExpenditures.The

valueforallcontractswillnotexceedanestimated$10,000,000over5yearswiththe

fundingtocomefromtheAirportDiningandRetail TenantMarketingFundplusthe

Port’scontributionof$1,142,500totheMusicProgram.



(3) June28,2016–TheCommissionauthorizedtheChiefExecutiveOfficer toprocureand

executefourconsultingcontractstopromotedoingbusinesswithAirportDiningand

Retailtenantsinamountnottoexceed$375,000fortheMusicProgram.

