Item Number:      8a_motion 
Meeting Date:   June 11, 2019 


1                                                   MOTION 2019-09: 
2                                 A MOTION OF THE PORT OF SEATTLE COMMISSION 
3 
4                           amending prior policy statements of the Port Commission
5                           regarding street pricing principles for the Airport Dining
6                           and  Retail  program  at  Seattle-Tacoma  International
7                           Airport; implementing an amended pricing policy for the
8                           Airport Dining and Retail program; and authorizing the
9                           Executive  Director  to  take  such  necessary  actions  to
10                        implement the amended pricing policy. 
11 
12                                                   PROPOSED 
13                                                 JUNE 11, 2019 
14 
15                                                 INTRODUCTION 
16 
17    The Port of Seattle Commission has previously passed two motions directing policy for the
18    Airport Dining and Retail program (the "ADR Program") at Seattle-Tacoma International Airport,
19    including policy direction with respect to prices charged by ADR Program concessionaires for
20    products and services provided at the Airport. 
21 
22    By motion entitled "Motion of the Port of Seattle Commission Regarding Quality Jobs, Service
23    and Employment Continuity Assurances for the Airport Dining and Retail Program," adopted
24    November 25, 2014, the Commission articulated various guiding principles for operation of the
25    ADR Program, including one principle calling for "continuation of 'street pricing' of products
26    and services." 
27 
28    Subsequently, by motion reflected in Port Commission Meeting Minutes dated November 24,
29    2015, Item 6.d, the Commission approved a temporary, conditional policy to authorize "street"
30    pricing plus up to ten percent (10%), with subsequent steps down year by year, to return to
31    strict street pricing effective January 1, 2020. 
32 
33    This motion revises the street pricing principle in the motion adopted on November 25, 2014,
34    repeals the temporary street pricing policy authorized by the motion adopted November 24,
35    2015, and establishes an amended pricing policy allowing ADR Program concessionaires to
36    charge street pricing plus a maximum of ten percent. 
37 


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38                                              TEXT OF THE MOTION 
39 
40    (1)     The Commission hereby amends the principles of ADR Program redevelopment within
41            the Statement of Policy Direction section of the Commission motion adopted November
42            25, 2014, to delete, in its entirety, the following principle: 
43 
44            5. Continuation of 'street pricing' of products and services 
45 
46    (2)     The Commission hereby repeals, effective January 1, 2020, the temporary street pricing
47            policy  established  by  the  Commission  motion  adopted  November  24,  2015  (Port
48            Commission Meeting Minutes dated November 24, 2015, Item 6.d). 
49 
50    (3)     Amended Pricing Policy for ADR Concessionaires. 
51 
52            (a) The Commission hereby adopts and authorizes the Executive Director to implement
53                an amended street pricing policy to allow concessionaires in the ADR Program to set
54                prices at not more than ten percent (10%) above "street" prices for all products and
55                services sold at the Airport ("Amended ADR Pricing Policy"); provided, that this
56                Amended ADR Pricing Policy will only be extended to concessionaires if they offer: 
57 
58                1.  Wages equal to or exceeding the minimum wage standards set forth in Chapter
59                    7.45 of the City of SeaTac Municipal Code; 
60 
61                2.  Payment of sick and safe time, which shall be accrued at the rate of one hour for
62                    every 40 hours worked; 
63 
64                3.  Health insurance to full-time employees, consistent with the Affordable Care
65                    Act; and 
66 
67                4.  Comply with any reasonable request from Port staff for verification of actual
68                    wages paid to the tenant's employees. 
69 
70                The above requirements (1.) through (4.) may be waived for employers with a bona
71                fide collective bargaining agreement. 
72 
73            (b) The Executive Director is directed to begin implementation of this Amended ADR
74                Pricing Policy, including review and processing of ADR Program concessionaire
75                requests for approval of price adjustments based on the Amended ADR Pricing
76                Policy.
77 
78                1.  Beginning on January 1, 2020, eligible ADR Program concessionaires may charge 
79                    approved street pricing plus up to a maximum of ten percent (10%) under this
80                    Amended ADR Pricing Policy.

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81                2.  Until January 1, 2020, concessionaires shall continue to adhere to the current
82                    street pricing policy established by the Commission motion adopted November
83                    24, 2015 (Port Commission Meeting Minutes dated November 24, 2015, Item
84                    6.d).   Concessionaires  who  do  not  satisfy  requirements  (1.)  through  (4.)
85                    identified in paragraph (a) above, as verified by the Port, shall be limited to
86                    charging strict street pricing for their products and services commencing January
87                    1, 2020. 
88 
89            (c) The Executive Director is further authorized to take all such actions as necessary to
90                implement the Amended ADR Pricing Policy described herein, including: 
91 
92                1.  Development of (or adjustment to) procedures for review and confirmation of
93                    proposed concessionaire pricing; 
94 
95                2.  Revision to operational policies and procedure relating to pricing requirements
96                    for ADR Program concessionaires; 
97 
98                3.  Preparation and execution of necessary lease amendments, addenda and/or
99                    other  documentation  necessary  to  approve   pricing  of   ADR  Program
100                   concessionaire products and services  and adherence to the  Amended ADR
101                   Pricing Policy. 
102 
103                                    STATEMENT IN SUPPORT OF THE MOTION 
104 
105    In  taking  this  action  the  Commission intends to support the Executive Director's
106    recommendation to establish an amended policy to allow ADR Program concessionaires to
107    charge street pricing plus up to 10 percent (10%) for products and services offered at the
108    Airport. The Commission and staff have heard from large prime operators as well as small, local
109    and minority-owned concessionaires who have expressed concern regarding the increased cost
110    of doing business at the Airport and the impact of those higher costs on their ability to operate
111    viable businesses.
112 
113    These cost pressures are evident in the building out and refurbishing their units, the wages and
114    benefits paid to their employees and the services that are necessary to operate their businesses
115    at the Airport (for example, security badging, parking, common area maintenance fees, unified
116    pest management, trash recycling, and adherence to Commission Resolution No. 3725). 
117 
118    Higher costs in these areas, together with the scheduled return to required strict street pricing
119    in January 2020, has decreased the interest of new firms in bidding for leasing opportunities at
120    the Airport and has led several current concessionaires to express concerns about their ability
121    to operate profitable businesses. 
122 
123    The Commission recognizes that circumstances at the Airport will continue to evolve and
124    flexibility may be necessary to reach our mutual goals of excellent customer service and

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125    attractive dining options.  However, by this motion, and consistent with these goals, allowing
126    street plus 10% pricing provides concessionaires with an enhanced ability to recover their
127    higher costs, improves the opportunity for concessionaires to procure quality products and staff
128    resources, and will likely  increase the  number and variety of small-business and other
129    proposers for future concessions opportunities at the Airport. 


















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