6b Supp
Item Number: RVSD_6b supp-1 Date of Meeting: October 28, 2014 Airport Dining and Retail Program Investments for the Future ACTION ITEM October 28, 2014 Realizing a Vision for Airport Dining and Retail - 2025 Today (2014) Tomorrow (2025) Gross Sales $217 M $400 M (+84%) Revenue $33 M $64 M (+94%) SPE $11.65 $15.76 (+37%) Jobs 1,640 2,290 (+40%) ACDBE/small/ $76 million $160 million local (35% of total (40% of total sales of sales of $217 $400 million) million) 2 Updated Square Footage Requirement Location Existing Required* Square Square Square Footage Footage Footage Shortage Main Terminal 142,820 160,120 (17,300) South Satellite 16,800 43,845 (27,045) North Satellite 19,652 45,707 (26,055) Airport Total 179,272 249,672 (70,400) Airport Dining and Retail needs room to grow 3 Why investment in infrastructure? Ability to serve 26 million enplanements by 2025 Ability to grow square footage from 179,000 to approximately 250,000 square feet Ability to grow gross sales to $400 million by 2025 Passenger-centric strategy meets future needs and grows revenue 4 Why begin investment now? First lease expirations in 2015 Work must take place after lease expiration, before units are re-leased 2015-2016 are critical years to complete work Coordination with other facility projects Must begin work now to maintain customer service and revenue 5 Proposed Investment Design Authorization: $2,801,000 Phase I Construction: $10,956,000 Phase II Construction: $ 6,397,000 Total Project Cost: $17,353,000 6 Master Plan Drivers Ability to meet future passenger demand in every area of the airport Maintain service during construction Maximize use of very limited square footage Critical to preserving existing revenue streams and driving new non-aeronautical revenue 7 Three Categories of Infrastructure Public access to undeveloped space Reconfiguration of existing space Modification and/or addition of utilities 8 Central Terminal Current square footage: 59,275 (incl. vacant) Required future square footage: 60,157 Develop 6,000 sq ft vacant south mezzanine level space Develop 4,000 sq ft vacant space north mezzanine Reorient pre-security food service 9 Central Terminal Public access to 6,000 sq ft restaurant space 10 Central Terminal Baggage Optimization Project Elevators below concourse level Coordination necessary Addition of elevators not possible later 11 Central Terminal Scope of Work: Add two elevators and stairs to mezzanine Modify base building facade Reconfigure quick serve units Remove/replace existing grease duct system Modify back of house vestibules 12 Central Terminal Scope of Work, continued: Reconfigure existing retail units Reorient pre-security units to post-security Convert children's play area to retail space Data/communications 13 Concourse A Current square footage: 25,013 Required square footage: 27,076 Create new open-air restaurant and gourmet market Add new retail Add new services 14 Concourse A Create new local cuisine, open-air restaurant & gourmet market 15 Concourse A Scope of Work: Reconfigure units to create retail and services where none exist Convert current food court seating to revenue generating square footage Modify/add utilities to multiple units Data/communications 16 Concourse B Current square footage: 14,047 Required future square footage: 14,563 Eliminate one coffee, move another Add specialty retail Add children's play area Add new casual dining 17 Concourse B Create new casual dining, children's play area and adjacent specialty retail 18 Concourse B Scope of Work: Reconfigure food service spaces Create new children's play area Create new specialty retail from food service Convert storage unit/vestibule to new unit Data/communications 19 Concourse C Current square footage: 16,841 Required square footage: 22,345 Convert non-revenue space to revenue Add new quick serve Reduce size for service Reconfigure units in 'beyond dogleg' area 20 Concourse C Relocate vertical mechanical chase from storefront 21 Concourse C Scope of Work: Relocate Horizon Customer Service Center Relocate vertical mechanical chase to provide better access to tenant space Reconfigure spaces for maximum use of square footage Add/modify utilities in multiple locations Add grease interceptor Data/communications 22 Concourse D Current available square footage: 10,993 Required square footage: 23,509 Eliminate one convenience retail Add children's play area Relocate single convenience retail to better location 23 Concourse D Merge vacant space into new 'street corner' retail 24 Concourse D Scope of Work: Reconfigure space for better placement of food service & convenience retail Create new children's play area Data/communications 25 Pre-Security Current available square footage: 16,651 Supportable square footage: 15,958 Reduce square footage for convenience retail Add new quick serve Still two coffee options 26 Pre-Security Divide unit in half to create new quick serve restarant 27 Pre-Security Scope of Work: Create more food service to appeal to meeter/greeter and airport employees Relocate convenience retail to more appropriately sized space Data/communications 28 Other Related Future Projects No development without new capacity Central Terminal HVAC capacity Concourse C electrical capacity Program will bear some portion of cost 29 Net Present Value Entire Project Investment: $17,353,000 Analysis over 20 years Discount rate: 7.5% Internal Rate of Return: 15% Net Present Value: $21 million 30 Mezzanine Dining Keys to Success Sales increased by 300% over generic concept Salt Lake International Airport: Strong brand name concept Striking sightline bright, airy Obvious access 31 Mezzanine Dining - Keys to Success Dallas Ft. Worth International Airport: No strong brand name concept No strong sightline dark, enclosed Unclear access 32 Net Present Value Analysis Elevators Only Based on enplanements/sales forecasts 20-year investment Compared to - Do Nothing scenario Compared to cost of expansion elsewhere Anthony's out of capacity by 2022 Other capacity capped in 2026 Cost: $6.7 million IRR/Net Present Value: 9.3% / $1,301,163 33
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