Item Numbers: 6a 6b 6c EXHIBIT A 
Date of Meeting:  December 9, 2014 
Airport Dining and Retail Program 
Authorization of Prime Lease
Modifications 
ACTION ITEMS 
November 25, 2014

Airport Dining & Retail Master Plan 



2

Anticipated Commission Actions 
Authorization of Lease    Authorization of Design   Authorization of Prime    Review Leasing Plan 
2014  S. Satellite Restaurant  Phase I Infrastructure   Lease Modifications    and New RFP 
3rd Quarter            October 28           November 25            January 
COMPLETED      COMPLETED 

Authorization of
Authorization of Leases   Authorization of Leases   Authorization of Leases
2015   Construction Phase I
for Personal Services     for Food & Beverage      for Specialty Retail 
Infastructure
2nd Quarter           3rd Quarter            4th Quarter 
1st Quarter 




3

Phasing Plan: Groundwork for 
New Opportunities 
Following finalization of         Number of units and locations 
Anticipated timeline for competition 
transition phasing, the leasing
Type of competitive process 
plan will consist of packages for    Anticipated investment requirement 
every existing and new location:    Preferred offering and/or concepts 



4

Airport-Wide Expirations
2015-2017 
5

Phasing Plan Strategy 
Develop a phasing plan that mitigates impact by spreading
expirations over several years 
Avoid wide-spread closures in 2017 
Assure adequate customer service in all parts of the
airport 
Maintain revenue generation to the Port 
Mitigate employment instability 
A well-conceived phasing plan is the best solution 
for the traveling public and the Port 
6

Prime Lease Expirations 
PHASE I             PHASE II             PHASE III 
2015-2016           2017-2019           2020-2024 
(2 years)               (3 years)              (5 years) 
1                 1 
UNIT            60           UNIT 

UNITS 

Current schedule of expirations is not manageable 
7

Proposed Prime Lease Expirations 
PHASE I             PHASE II             PHASE III 
2015-2016           2017-2019           2020-2024 
(2 years)               (3 years)              (5 years) 


Early Returns                                       New Leases 
13    22 *    27 
UNITS             UNITS              UNITS 
* Includes Concessions Intl. units 
Achievable schedule of prime operator expiration dates 8

Proposed Lease Modifications 
Prime Operator Units: 
Early Returns 
On-Time Expirations 
Extended Operation under Current Leases 
New Leases 

9

Lease Modification I: 
Anthony's Restaurant

Central Terminal Anchor Restaurant 
Opened in 2005 
Operated by HMSHost 
7,000 square feet 
Initial investment: $4.2 M 
Refurbished in 2010: $400K 
Sales $13 M in 2013 
Approx. 140 employees 



11

Anthony's Restaurant 
12

Phasing Proposal Summary 
Extend lease 2 years, 3 months (Sept. 2017) 
Eliminate two 5-year options 
Total lease term: 12 years, 3 mos. 
Increased percentage rent to Port 
Higher rent:10.5% (tiered) 
Longer term: $600,000 incremental
revenue 
13

Lease Modification II: 
Host

Host/SRA at Sea-Tac 
Master concessionaire 1963-2004 
Operates in 24 locations 
Leases 9 units to ACDBEs 
Employs 700 associates 
2013 Gross sales: $60 million




15

Phasing Proposal Summary 
Return six units early (2015-2016) 
No reimbursement for remaining value
($352,000) 
Six Host/SRA operated units expire on-time, four
North Satellite units remain in operation 
Four subtenant units expire on-time, five continue
operation additional 1-2 years 
Ten Host exclusive-concept units in a new lease
expiring in 2023 
16

Current Host Leased Space 
17

Early Return Units 
2015-2016 
18

Expiring On-Time 
12/31/2016 
19

Extended Operation 
2017-2019 
20

ACDBE Lease Expirations 
Four units proposed to expire on-time allow for
new opportunities, e.g: 
Concourse A restaurant/gourmet market 
Specialty retail 
Personal services 
Five units proposed to remain in operation for
an extended period between 15-24 months 
Total extended lease term: ~14.5 years 
21

Transition Lease Objectives 
Reasonable 'premium' rent in exchange for a
negotiated contract 
Only HMSHost's exclusive brand-name concepts,
e.g. Starbucks Coffee 
Balance desired new investment in as short a
lease as possible 

22

New Lease 
Food Package #1 
Expire 2023 
23

Summary of Proposed Terms 
Rent Tiers      Percentage        Proposal Summary 
New Expiration Date   2023 
New Investment      $7.2 million 
0 - $10 million   12% 
Net Book Value for    $352,000 
Returned Units 
$10,000,001 -   13%            Effective Rent        13.5% 
$20 million 
Estimated First Year    $26.1 million 
Sales 
Sales over $20   15% 
million                         Estimated Term       $27.3 million 
Revenue to Port 
Jobs Supported      250 

24

Recommended New Host Lease 
Benefits for the Port: 
Premium percentage rent 
Higher square footage productivity  Comparison    Current    Proposed 
All Host-exclusive, local sense-of-   Effective Rent    12.6%     13.5% 
place concepts 
Square Footage   13,606     11,689 
Staple brand Starbucks in place for
transition 
Estimated Sales  $1,675     $2,200 
Limited to ten units, preserves    per SF 
future competition 
Continuity of employment for 250
Host associates 
25

Lease Modification III: 
Hudson

Hudson at Sea-Tac 
Awarded in RFQ process 
Evolving to convenience
retail 
Employs 250 associates 
ACDBE ownership: 25% 
2013 Gross sales: $55
million 



27

Phasing Proposal Summary 
Return seven units early (2015-2016) 
No reimbursement for remaining value 
($1.2 million) 
$12.3 million in new investment to increase sales 
Two lease packages with different expiration dates,
two years apart 
Package #1: 6 units + 2 NorthSTAR limited duration,
Package #2: 9 units 
Increased percentage rent to Port 
28

Current Hudson 
Leased Space 
29

Early Return Units 
2015-2016 
30

Transition Lease Objectives 
Reasonable 'premium' rent in exchange for
negotiated contracts 
Split the current business into two packages 
Require investment to generate higher sales in
convenience retail 
Re-concept specialty retail to Hudson premium
brands, e.g. Coach 

31

New Lease 
Retail Package #1 
Expire 2022 
32

New Lease 
Retail Package #2 
Expire 2024 
33

Summary of Proposed Terms 
Rent Tier       Percentage 
Proposal Summary 
Convenience 
New Expiration   2022       2024 
0 - $25 million    16%           Date 
$25,000,001 -    17.5%         New Investment    $3.3 million   $9 million 
$45 million                   Estimated First    $27.1      $27.9
Sales over $45    19%          Year Sales        million     million 
million                       Net Book Value for       $1.2 million 
Returned Units 
Rent Tier       Percentage 
Effective Rent             16.4% 
Specialty 
0 - $10 million    9%            Estimated Term          $82 million 
Revenue to Port 
$10,000,001 -    10% 
$15 million                   Jobs Supported            250 
Sales over $15   11.5% 
million                                                        34

Recommended New Hudson Leases 
Benefits for the Port: 
Comparison    Current    Proposed 
Premium percentage rent 
Appropriate reduction in square
footage                     Effective Rent   15.1%     16.4% 
Higher square footage productivity 
Splits business into two packages    Square Footage  32,336    26,992 
New investment in 2015-2016 
At full capacity for transition        Estimated Sales $1,688     $2,044 
Continued ACDBE ownership      per SF 
Continuity of employment for 250
Hudson associates 
35

'
7
PRE-2004 '   2017-2024   2024 &
MASTER    =4: 1"         TRANSITION    FORWARD
CONCESSIONAIRE

I
"'9
FOOD         i.' '3:        FOOD       ALL UNITS
RECOMPETED
HMS Host      HMS Host      Multiple New
Packages for     Fd
NEWS/GIFT     SRA
Primes, Local,     R9 a1t 1
HMS Host      Concessions     Small &
International       Disadvantaged     Duty Free
DUTY FREE
ACDBE       HMS Host
HMS H081:
Subtenants (10)    Recompete 2023
ACDBE SUbtenants  Direct Leases     ACDBE (6)

Subtenants
"


'                            ,  Recompete
Hudson
2018-19
.11-"   571"":15          RETAIL
.
Dufry           Hudson
Recompete
2022, 2024
DUTY FREE
Dufry
Recompete 2020

36