COMMISSION 
AGENDA MEMORANDUM                        Item No.          6d 
ACTION ITEM                            Date of Meeting     December 11, 2018 
DATE:     December 4, 2018 
TO:        Stephen P. Metruck, Executive Director 
FROM:    James Schone, Director, Aviation Commercial Management 
Dawn Hunter, Sr. Manager, Airport Dining and Retail 
SUBJECT:  Airport Dining and Retail Tenant Reimbursement Request and Lease Amendment for
SP-LW LLC 
Amount of this request:              $360,095.72 
ACTION REQUESTED 
Request Commission authorization for the Port to reimburse Seattle-Tacoma International Airport
tenant SP-LW LLC (Sub Pop-Li'l Woody's) up to an amount not to exceed $360,095.72 for costs
incurred in the design of the CC-06 unit awarded to this firm in the Airport Dining and Retail Lease
Group 3 and for the Executive Director to execute a lease amendment with this firm that includes
a change in premises, construction build-out, and lease termination dates, as well as a mutual
release of any potential claims relating to the unavailability of unit CC-06.
EXECUTIVE SUMMARY 
As part of the Airport Dining and Retail (ADR) Master Plan, a certain number of retail spaces in the
airport terminal were designated for conversion to food and beverage units in order to meet the
projected demand from passengers at Seattle-Tacoma International Airport (Airport).  One of
these spaces identified for conversion is located on Concourse C (CC-06) (Exhibit A) and was
included in the ADR Lease Group 3 (LG3), approved for solicitation of competitive bids by the
Commission on June 14, 2016, as a full-service restaurant.
Food and beverage operations require significantly more utilities, specifically: water, gas, sewer
and a grease waste line, than a retail business does. Following award of the lease for the CC-06
space to SP-LW in June 2017 for construction of Poppa Woody's, a gourmet burger restaurant with
a bar, Port staff undertook the work necessary to bring the required utilities to the leasehold line
for use of this space by the tenant as a full-service restaurant. During this work, it was determined
that the required grease waste line could not be installed per current building codes.  Port staff
and the design team from SP-LW worked diligently together in the subsequent months in an
attempt to find a solution that met the building code requirements and was cost effective for all
parties involved.  After extensive discussions evaluating all possible options, it was determined
that the space CC-06 was not suited for a full-service food and beverage operation. 

Template revised April 12, 2018.

COMMISSION AGENDA  Action Item No. 6d                                  Page 2 of 4 
Meeting Date: December 11, 2018 
Given this determination, the most cost-effective solution is to reimburse SP-LW for their verified
costs incurred to-date for design of the CC-06 space through a tenant reimbursement agreement
totaling $360,095.72 and to amend their lease for use of a comparable space elsewhere in the
terminal, specifically NS-23 (Exhibit B), for the same period of time as was intended for the lease 
of the CC-06 space. 
JUSTIFICATION 
The Airport Dining and Retail Master Plan was developed in 2013-2014 to guide the
redevelopment of the Airport's dining and retail program as leases for 90% of the ADR units were
expiring between 2015 and 2017. This master plan identified the need for significantly more space
devoted to food and beverage operations to meet the demand from the forecasted growth in
enplanements through 2025.  The master plan proposed the creation of new dining and retail
spaces in the terminal as well as the conversion of spaces then used for retail businesses for use as
food and beverage operations.  One of the spaces proposed for this conversion from a retail
location to a food and beverage operation was CC-06 located on the C Concourse. 
This space, Single Unit Package #5, was one of a number of leasing opportunities included in ADR
LG3 which was approved by the Commission for competitive solicitation on June 14, 2016. SP-LW,
a joint venture between Sub Pop and Little Woody's;  two small, locally-owned businesses, 
submitted a bid for this space and were awarded a Lease and Concession Agreement (Agreement) 
in June 2017 for operation of Poppa Woody's, a gourmet burger restaurant with a bar. Following
award of the Agreement, Port staff commenced with the work to convert the vacant CC-06 space
to a food and beverage unit.  This work included the reconfiguration of utility lines to bring all
required utility points of connection to the leasehold line for final connection by the tenant.  As
this space had previously been used for a retail business, the only existing utility service available
at the location was electricity. 
As an early step in SP-LW's design efforts, Port staff and the tenant agreed that coordinating the
installation of the grease waste line would be best served through a joint effort to locate the point
of connection and a single effort to design and construct the line. Typically, these utilities are
designed and constructed separately; t he Port provides the utilities from the main lines to the
leasehold line of the tenant space and the tenant connects to these utilities relocating them as
necessary to best serve the layout of their space. Because this location was particularly challenging
due to its remoteness from the main grease waste lines and the amount of intervening other
utilities, all agreed that a single effort would yield the best results. 
Based on the tenant's design work, it became apparent  that the grease line could  not be
connected to the unit without major disruption to the surrounding terminal building as well as 
exorbitant costs that would prove too onerous for SP-LW, a local small business. Port staff and the
tenant's design team then engaged in extensive discussions over several months to identify
options to resolve this issue. Ultimately, it was determined that the grease line could not be built
in a manner that would meet applicable building code requirements and the operational needs of 
the tenant. 

Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. 6d                                  Page 3 of 4 
Meeting Date: December 11, 2018 
Based on these factors, coupled with a desire to alleviate further time and financial burden to SPLW
, Port staff determined that the best option was to reimburse SP-LW for all verified design costs
expended to date on the CC-06 space and to offer the firm a comparable space elsewhere in the
Airport.  The comparable space is NS-23 located in the North Satellite.  SP-LW has agreed to this
proposal. This change in premises along with other changes necessitated by this action including
build-out dates and the lease termination date along with a release of all claims between both
parties are included in the attached lease amendment (Exhibit C).  There are no changes to the
concession fee or other commitments made by SP-LW in their proposal for the CC-06 space that
was competitively bid as part of ADR LG3. The NS-23 space was planned as a full-service 
restaurant to be included for competitive solicitations in ADR Lease Group 5. This unit will be built
as part of the North Satellite Phase 2 work. 
Key Changes to the Lease and Concession Agreement: 
Section                 Current Language                        Amended Language 
Premises       Unit CC-06 approximately 1,290 square feet   Unit NS-23 approximately 1,800 square feet 
(1.33) 
Expiration       September 30, 2028                          December 31, 2031 
Date (1.14) 
Build-Out       October 1, 2018                             Approximately 120 calendar days following
Deadline Date                                             the Occupancy Date. The Port shall confirm
(7.2.1)                                                                the Build-Out Deadline in writing. 
This situation has illuminated the need of additional planning for implementation of the ADR
Master Plan regarding utility hook-ups for spaces  being converted from retail to food and
beverage locations.  Port staff has now put in place the appropriate protocols to ensure that the
necessary planning for the utility infrastructure for each proposed unit has been completed and
the associated costs are fully understood and that each proposed space is viable for the chosen
concept. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1  Require tenant to develop a different concept for the CC-06 space that does not
require all the utility infrastructure for a full service restaurant. 
Cost Implications: No cost implication for the Port. 
Pros: 
1)  There would be no costs incurred by the Port. 
Cons: 
1)  This would negatively impact the tenant's financial position given the large sum of money
already expended for design of the Poppa Woody's concept. 
2)  This alternative could lead to potential claims by the tenant due to its inability to complete
build-out of this space without incurring costs that would make its business untenable 
3)  This would cause a hardship for a local, small business 

Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. 6d                                  Page 4 of 4 
Meeting Date: December 11, 2018 
4)  If the tenant is requested to develop a retail concept for this space (instead of the food
service concept they competed for), this could lead to a challenge against the Lease Group
3 competitive process. 
This is not the recommended alternative. 
Alternative 2  Reimburse the tenant for their verified design costs expended to date on the CC-06
space and offer the tenant an alternate space (NS-23) in the Airport 
Cost Implications: $360,095.72 
Pros: 
1)  This would resolve any potential claims by the tenant against the Port 
2)  This reduces the financial burden on a local small business 
Cons: 
1)  There is a substantial financial cost to the Port 
2)  The alternate space given to the tenant will result in the elimination of this space from a
future lease group 
This is the recommended alternative. 
FINANCIAL IMPLICATIONS 
This is not a budgeted expense  and will result in an unfavorable variance in 2018.   This
unbudgeted expense can be absorbed by the Aviation Division within the non-aeronautical net
operating income budget due to non-aeronautical revenues in excess of the 2019 budget. The
funding for this expense will come from the Airport Development Fund.
ATTACHMENTS TO THIS REQUEST 
(1) Exhibit A CC-06 Diagram 
(2) Exhibit B NS-23 Diagram 
(3) Exhibit C Draft lease amendment 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
June 14, 2016  The Commission authorized Airport Dining and Retail Least Group 3. 




Template revised September 22, 2016; format updates October 19, 2016.