PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6d 
ACTION ITEM 
Date of Meeting    September 27, 2016 
DATE:    August 25, 2016 
TO:      Ted Fick, Chief Executive Officer 
FROM:   James Schone, Director, Aviation Business Development 
Scott Van Horn, Senior Business Manager, Airport Dining and Retail 
SUBJECT:  Competitive Solicitation for the Airport Advertising and Promotion Concession 
Revenue Implications:    $3.8 million is minimum annual guarantee for first year 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to conduct a competitive
solicitation and execute a lease and concession agreement with a selected single proposer for the
right for an advertising and promotion concession at Seattle-Tacoma International Airport for a
period of ten years. 
SYNOPSIS 
The advertising program at the Airport is a critical piece of the overall generation of nonaeronautical
revenue accounting for 2.7% of total Airport Dining and Retail (ADR) gross sales 
($7.3 million of the $271.5 million) and 11% of ADR revenue to the Port ($5.0 million of the
$44.7 million) in 2015. The advertising program brings public awareness to businesses located
within the Pacific Northwest as well as national brands. The current advertising concessionaire 
employs two local employees and utilizes local contractors for electrical work, installation, and
other services to support the program. 
The last solicitation for the advertising program at the Airport was conducted in 2007. During
this ten-year period, there have been many changes to advertising mediums, from digital displays
to social media campaigns. In this new solicitation, staff is looking to capitalize on these
changes while also improving the look and feel of the advertising program by: 
Upgrading older displays and equipment with newer technologies; 
Reallocating a number of existing static locations to digital displays; and 
Providing additional locations within the concessionaire's inventory for non-static/digital
display elements as well as promotional activities e.g., credit card booths, kiosks, etc. 
This proposed agreement is for 10 years, same as the current agreement, in order to provide
sufficient opportunity for the lessee to amortize the capital investments that the Airport is
requesting. 

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
August 25, 2016 
Page 2 of 9 

Additionally, the Airport is looking to enhance its ability to provide opportunities for the
surrounding communities and state-wide industries to promote within the Airport. This will be 
done through a combination of Port-controlled inventory locations, the use of unsold advertising
"filler" spots, cultural and historical exhibits, and the use of photographs on construction
barricades. 
Staff is recommending the release of the solicitation at this time in order to provide adequate
time for a transition between the new advertising concessionaire and current operator (if the
current operator is not chosen as the preferred respondent through the competitive process).
BACKGROUND 
The current 10-year advertising agreement with Clear Channel will expire on July 31, 2017.
Clear Channel was awarded this agreement through a request for proposal (RFP) process that
was conducted in 2006-2007. The current agreement does not include any provisions for term
extensions or options. 
The range for airport advertising agreement term lengths is 5 to 10 years.  Longer terms are
usually driven by a need for larger capital investments, thereby allowing sufficient time to
amortize the investment.  In the case of this Airport, there are multiple factors behind the
proposed 10 year lease term: the sizeable capital investment requested for the new digital
displays, as well as capital investment needed for the new North Satellite and South Satellite
upon their completion. The lessee will also be required to do a mid-term refresh of their display
units (credit card booths or other fixtures), sign frames, as well as maintain all digital network
hardware (screens, computers, etc.). 
The current advertising program includes 174 locations throughout the Airport of which the
majority are a still photo on a poster inside a glass case known as static advertising displays. 
There are also several digital displays that show videos such as those located on the baggage
carousels in baggage claim. In addition, the program allows for advertisers to have interactive
displays for their products or services in key locations throughout the Airport.  In the 10 years
since this agreement was signed, the advertising industry has moved toward the use of video
monitors to display static, video, and interactive touch screen messages. In addition, the industry
is emphasizing sponsorship and promotional events for specific products or services. 
The financial performance metrics for the past three calendar years and through Q2, 2016 for this
agreement are as follows: 
Advertising annual sales: 
o  2013 - $3.9 million 
o  2014 - $6.8 million 
o  2015 - $7.3 million 
o  2016 - $3.5 million (Q2) 

Revised March 28, 2016

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
August 25, 2016 
Page 3 of 9 

Advertising annual revenue to the Port of Seattle (Port): 
o  2013 - $2.7 million 
o  2014 - $4.8 million 
o  2015 - $5.0 million 
o  2016 - $3.1 million (Q2) 
PROGRAM DESCRIPTION 
The purpose of the lease and concession agreement is to generate non-aeronautical revenue for
the Airport. The advertising program also supports the Century Agenda goal of advancing the
region as a leading tourism destination and business gateway. 
Locations included within this solicitation for advertising, sponsorship, and product/service
promotions are in the Airport's terminal buildings, sky bridges, jet ways, and parking structures.
This solicitation does not include any billboards on the roadway systems. 
Technology Requirements 
As the median age of the Airport passenger becomes younger (in 2015, 60% of the Airport's
passengers were younger than 50 years old) the look, feel, and delivery methods of the
advertising messages should be updated. While it is cost-prohibitive to convert all advertising
locations to a digital-based network, the Port has identified 14 locations where new digital
displays will be added to the inventory. Furthermore, the preferred respondent may identify
additional static inventory locations in the Airport where digital displays are warranted. This
allows for a greater number of opportunities for companies wishing to have an advertising
presence at the Airport. 
In addition to increasing the number of digital displays, the Port is looking for an overall
cohesive look and feel to the digital network that will enhance the passenger experience. 
Community Promotional Opportunities 
Neighboring communities, as well as non-profit organizations with historical, cultural and
trade/commerce programs, have requested opportunities to promote their respective interests in
the Airport. The main limiting factor regarding what can be done in this area is the U.S. Federal
Aviation Administration (FAA) revenue use policy. In general, airports are prohibited from
using airport revenue for general economic development or for marketing and promotional
purposes unrelated to airports. With this requirement in mind, staff has developed the following
recommendations to include in the upcoming Advertising RFP, as well as other opportunities not
directly associated with the RFP: 
Allocate 7 advertising locations (1 per A, B, C and D Concourses, N. Satellite, S. Satellite 
and Baggage Claim) from the current advertising inventory for use by the Port and/or

Revised March 28, 2016

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
August 25, 2016 
Page 4 of 9 

neighboring communities impacted by the Airport to enhance positive community relations
in support of the Airport: 
A number of these advertising locations will be made available to neighboring
communities for messages that promote travel through the Airport. The messages may be
jointly sponsored by the Port at these locations focusing on increasing travel through the
Airport. 
o  Examples of these types of promotional messages that could be done are: 
The City of (insert name), with over 1,000 hotel rooms, welcomes
passengers to Seattle-Tacoma International Airport 
Seattle-Tacoma International Airport welcomes attendees to (insert name
of convention). Not e: staff recommends this only for conventions with
5,000 delegates or more 
Seattle-Tacoma International Airport has over 10 daily flights to
Washington Wine Country 
The community requesting the promotion would be responsible for all costs associated
with the development, production and placement of the advertisements. 
Port staff (Public Affairs and Tourism) would be responsible for approving the initial
content of these promotions. 
Include the right of first refusal in the lease to use "filler" or unsold advertising inventory: 
The agreement would include a clause stating that should the concessionaire have any
unsold advertising inventory, the Port would have the right of first refusal for its use or
use by communities/non-profit organizations. 
The Airport will receive revenue from this inventory as the concessionaire remains
obligated to pay the Minimum Annual Guarantee for unsold advertising inventory. As
such, the message from the neighboring communities can be much broader in nature. 
o  Examples of what messages could include: 
Visit (city name) 
Explore the wine country 
Welcome convention attendees (5,000 delegates or more) 
It is important to note that messages in these locations will be up for only that period of
time before the location is sold to a regular advertiser, and it is unpredictable as to when
these locations will be available. 
The communities and/or trade associations would be responsible for all costs associated
with the production and placement of these advertisements. 
Port staff (Public Affairs and Tourism) would be responsible for approving the content of
these advertisements. 


Revised March 28, 2016

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
August 25, 2016 
Page 5 of 9 

Communities or industries may purchase advertising: 
A community or non-profit organization may also purchase advertising inventory from
the advertising concessionaire. In this case, there would not be the restrictions on these
messages as mentioned above. As with all advertising, these messages must comply with
the Airport's advertising policy as outlined in the Rules and Regulations (Exhibit A). 
Other non-advertising promotional opportunities: 
Although this will not be part of the inventory for the Advertising RFP, there are other
promotional opportunities for the Port, neighboring communities, as well as non-profit
organizations with historical, artistic, cultural and trade/commerce programs, through use
of the temporary exhibit component of the Port's Art Program as well as temporary
construction barricades. 
Art Program 
Those communities and non-profit organizations that have exhibits that are historical,
cultural, artistic and trade/commerce- themed, may seek approval to install these exhibits
in the Airport through the Art Program. The exhibit and all artifacts associated with the
exhibit are to be provided by the sponsor of the exhibit and must comply with the
Temporary Exhibit Guidelines (Exhibit B). 
Examples of exhibits include: 
o  Aviation history in the state 
o  Wine growing regions of Washington State 
o  Ethnic heritage celebrations 
Temporary construction barricades 
Messages on temporary construction barricades are intended to educate the traveling
public about new concessions, airline services that are available to the public, or other
public services that are coming soon. Should a tenant not wish to promote its business on
the barricade, the Port may use this location for photographs only. All photographs must
be non-commercial in nature. 
Authorization Approach 
This opportunity will be competed via the RFP process with award being made to the firm that
offers the best value to the Port. Consistent with the Century Agenda, the Port will include a
small business component and evaluate the proposer's commitment to utilization of small
businesses. 

Revised March 28, 2016

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
August 25, 2016 
Page 6 of 9 

Evaluation Criteria 
The following criterion will be evaluated.
Company Profile, Experience and Financial Capability                 10 points 
The company must demonstrate stability, experience and expertise in operating a similar lease
and concession agreement as proposed, in a similar environment.  The proposer must
demonstrate that the company has the financial capacity to fulfill the commitments of an
agreement with the Port. 
Marketing Plan and Implementation                             20 points 
The proposal will be evaluated based on the quality of the overall marketing plan for the Airport's
advertising inventory and promotional opportunities. 
Design, Implementation, Materials and Capital Investment               15 points 
The proposal will be evaluated based on the quality of design that brings an overall cohesive
look to the program. 
Financial Projections and Rent Proposal                            20 points 
Financial projections and rent proposals will be evaluated based on the reasonableness of the
financial projections and the proposed percentage rent fee. 
Management, Staff, Operations and Environmental Sustainability           25 points 
The company must demonstrate its ability to effectively manage a comprehensive advertising
program, which also includes quality leadership and adequate levels of staffing. 
Small Business Participation                                    10 points 
The company must identify opportunities for the inclusion of small business participation
opportunities including, but not limited to product sourcing; joint venturing /mentoring/ 
subleasing/subcontracting; and design/construction/maintenance.
Lease Parameters 
The lease term for this new agreement will be for a period of ten years commencing on August 1,
2017. 
For this new opportunity, the Port will establish the minimum annual guarantee of $3.8 million
for the first year of the agreement and a minimum percentage rent of 67%. These amounts have
been calculated based on the past performance of the program. The purpose of these minimum
amounts is to protect the Port's financial interest. For the second and subsequent years, the
tenant will be required to pay either 85% of the previous year's actual rent payment, or
percentage rent based on gross sales achieved during the year, whichever is greater. 

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COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
August 25, 2016 
Page 7 of 9 

Interested businesses will propose both on the minimum annual guarantee and percentage rent to
the Port. These proposals shall be at or above the minimum amounts specified above. Proposers
may propose this either as a flat rent or tiered percentage rent. Each proposer must provide the
Port with a pro forma analysis that serves as the basis for the sales projections, rent offer, costs to
operate the business (including goods, labor, debt service, etc.) as well as the anticipated profit
margin.
A fixed security (based on the proposed MAG) will be required as part of the agreement. 
SOLICITATION SCHEDULE 
Due to the complexity of the advertising agreements between advertising concessionaire
operators and their customers, six months is the desired time frame for a transition between
operators in order to allow for the transfer of existing advertising agreements, the development
of content, and the design and construction of new advertising features. The following schedule
is based on providing a five to six (5-6) month transition period.
September 2016             Request Commission approval for competitive solicitation 
October 2016 to December 2016  Competitive solicitation 
January 2017               Award to preferred respondent 
February through July 2017      Preferred respondent transition (if necessary) 
August 1, 2017              New agreement in effect 
STRATEGIES AND OBJECTIVES 
The authorization of this competitive solicitation supports the 25-year vision of the Port's
Century Agenda to create 100,000 new jobs through economic growth led by the Port. This
opportunity also supports a number of the strategies and objectives of the Port's Century Agenda
over the next quarter century: 
Advance this region as a leading tourism and business gateway; 
Promote small business growth and workforce development; and 
Be the greenest and most energy efficient port in North America. 
The Airport also has a number of shorter term strategic goals: 
Strategic Goal:             Achieved Via: 
Operate a world-class       Meet the needs of tenants, passengers and the region's
international airport          economy 
Lead environmental        Lead sustainability programs to minimize waste and conserve
innovation, minimize impacts   water and energy 
Reduce airline costs         Provide 50% revenue-sharing with airlines  above specific

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COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
August 25, 2016 
Page 8 of 9 

debt service threshold 
Maximize non-aeronautical   Drive an increase in sales per enplanement to maximize
income                growth in revenue 
Develop valued community   Work in tandem with other Port resources, other partner
partnerships              agencies and community entities to foster partnerships 
FINANCIAL IMPLICATIONS 
Annual revenue to the Port will depend on the proposed terms and performance. The minimum
annual guaranteed revenue to the Port for the first year is $3.8 million. 

ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1  Do not release a solicitation and instead negotiate a new concession agreement
with the existing operator. 
Cost Implications: The Port would have a potential savings on administrative costs associated
with preparing, releasing, scoring, and negotiating an agreement from a solicitation. 
Pros: 
(1) By negotiating a new concession agreement with the existing operator, that operator 
will be able to secure longer term advertising deals with potential advertisers. 
(2) Staff could negotiate the capital investment and improvements required for the
program. 
Cons: 
(1) With a higher capital investment, and through the negotiations, a potential reduction
in revenue to the Port may occur. 
(2) The Port would not be able to see what the current operator's competitors may
propose in rent or innovations to the advertising program. 
This is not the recommended alternative. 




Revised March 28, 2016

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
August 25, 2016 
Page 9 of 9 

Alternative 2  Request Commission authorization for the proposed release of the advertising
solicitation. 
Cost Implications: The Port's administrative cost to prepare, release, score, and negotiate an
agreement from a solicitation. 

Pros: 
(1) Provides an open competitive process for a concession opportunity that has not
occurred in ten (10) years. 
(2) Allows the Port to see what innovations other adverting companies may have.
Cons: 
(1) With the potential for high capital investment for the requested improvements, rents
may be reduced from those in the current agreement. 
(2) If the existing company is not selected as the preferred respondent, there would be a
transition period between the advertising companies, the Port, and existing advertisers. 
This is the recommended alternative. 

ATTACHMENTS TO THIS REQUEST 
PowerPoint presentation 
Exhibit A  Advertising policy 
Exhibit B  Temporary Exhibit Guideline 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None. 





Revised March 28, 2016