Template revised January 10, 2019.

COMMISSION

AGENDA MEMORANDUM

Item No. 8c

ACTION ITEM Date of Meeting April 22, 2025

Amount of this request: $739,725

ACTION REQUESTED

Request Commission authorization for the Executive Director to (1) execute Termination

Agreements; (2) payout where applicable Net Book Value (NBV) associated with the Termination

Agreements; (3) execute Lease and Concession Agreements and Amendments for certain Airport

Dining and Retail (ADR) Tenants impacted by various capital projects and unforeseen

construction-related delays.

the SEA Gateway/North Main Terminal Redevelopment (NMTR) Program. Phase B work enhances

the security screening checkpoint on the far north-end of the terminal and renovates the

restrooms adjacent to the Hudson, NE-05 location. As a part of this project, the Hudson location

will be closed for an elongated period and subsequent access to this location will be permanently

blocked by passenger queueing making it a non-viable concessions location requiring a

Termination Agreement and NBV buyout of this location.

Airline Realignment Project:

On June 25, 2024, Commission authorized supplemental funding and the execution of a

construction contract amendment for the Post IAF Realignment Project. The scope of work

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

Concourse A Duty-Free Project:

As part of the Lease and Concession Agreement dated June 22, 2016, for space CA-06, Africa

Lounge, the Port is required to provide a new location should the Port reclaim the space prior to

the natural termination of the agreement. On October 24, 2023, Commission authorized the

execution of a new Lease and Concession Agreement for the replacement of CA-06, Africa Lounge

due to the impact (displacement) due to the Concourse A Duty-Free Project. The initial approved

replacement location is a portion, approximately 40%, the size of the existing Africa Lounge

footprint. This request is to provide the SeaTac Bar Group tenant with a secondary inline space

(f/k/a CA-16) which was replaced by a terminal seating project. The request is to provide the

Concourse Concessions tenant with an equitable kiosk term of eight years applied to the current

Hachi-ko location, CC-16.

Concourse C Temporary Air Handling Units Project:

On August 11, 2020, Commission authorized the design and construction of two (2) temporary

air handling units for Concourse C necessary to support the new restrooms and three (3)

additional leased ADR locations which were leased and to be constructed. Due to project delays,

Host LPI SEA FB could not proceed with the design and construction of the Skillet location, CC-11,

and as a result incurred additional increased design and construction costs. The request is to

Phased Construction Schedule:

Post-pandemic, the Port determined to phase construction for the remaining N Concourse tenant

buildouts. This resulted in the delay of the P.F. Chang’s location, NSM-26 for a prolonged period

resulting in increased design and construction costs. The request is to modify the rent structure

to offset the additional costs incurred due to Port’s phased construction.

Checkpoint 1:

On March 22, 2021, Commission authorized the construction relocation of Checkpoint 1 to the

Gina Marie Lindsay Hall. The request is to include the new Checkpoint 1 into the premises of the

contract and extend the term for Security Point Media to expire in 2032 as the provider of bins

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

JUSTIFICATION

contracts impacted due to the variability of construction of capital projects. These amendments

cover tenants of various sizes, company structure and WMBE status.

The ADR program is governed by the Federal Aviation Administration (FAA) and will include

Airport Concession Disadvantage Business Enterprise (ACDBE) aspirational goals in line with the

Aviation Business Goals and Objectives. Current 2025 goals for ACDBE participation stands at

25%.

DETAILS

2025:

 Seattle Air Ventures JV, location SE-03 (Alki Bakery)

NBV Amounts

NBV buyout Amounts for the applicable Lease and Concession Agreements broken out by project

impact are as follows:

New Lease and Concession Agreements and Lease and Concession Agreement Amendments:

New Lease and Concession Agreements associated with capital projects:

1. Concourse Concessions, LLC, replaces impacted location CA-16.

2. SeaTac Bar Group, LLC, replaces impacted location CA-04.

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

Lease and Concession Agreement Amendments associated with capital projects and unforeseen

construction-related delays:

1. Host LPI SEA FB, LLC, CC-11 (Skillet) modified rent structure due to the

2. CI Grove Bay SEA, LLC, NSM-26 (P.F. Chang’s) modified rent structure related to

3. SecurityPoint Media, LLC (TSA security lanes and bins) modify the Premises to

Alternative 1 – Do not payout tenants Net Book Values.

Cost Implications: Unknown.

Pros:

Alternative 2 – Not provide replacement space to affected tenants.

Cost Implications: Unknown.

Pros:

Cons:

This is not the recommended alternative.

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

Cons:

capital projects and Port construction phasing who have been financially burdened during

the design and construction process for grossly elongated periods.

This is not the recommended alternative.

will reduce Non-Aeronautical NOI.

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

Given the rent reduction for P.F. Chang’s, Port revenue would be decreased by an estimated $1.8

million in the first eight years based on current sales projections. Since the rent tiers progressively

increase, anticipated relief is realized by 2032.