7b presentation
ITEM NO: __7b_Supp_____ MEETING DATE: January 24, 2017 Airport Dining & Retail Lease Group 3 - Lessons Learned and Lease Group 4 - Proposed Opportunities January 24, 2017 Agenda Commission Guidance and Goals for the ADR Program ADR Performance Metrics Outreach Update Employment Continuity Pool Update Lease Group 3 Update and Lessons Learned Lease Group 4 Opportunities Evaluation Criteria Schedule for Next Steps Providing new retail and dining opportunities at the Airport 2 Commission Guidance for the ADR Master Plan Encourage broad business participation; Use flexible competitive leasing processes to accommodate all types of business; Create new opportunities for small, disadvantaged and local businesses; Maximize employment continuity for qualified employees; Continue 'street pricing' of products and services; Improve efficiency and affordability in the unit build out process; Establish job quality expectations in competitive processes; Strengthen the local Pacific Northwest sense of place. Support a mix of businesses that create quality jobs 3 Commission Goals for the ADR Master Plan Grow sales per enplanement by at least 40 percent; Reach and remain within the top 10 North American airports as ranked by sales per enplanement; Grow gross revenues to the Port by 50 percent; Grow employment by 40 percent; Grow the share of sales generated by small, disadvantaged, and/or local businesses to 40 percent; Create an aspirational objective of increasing ACDBE gross sales to 25 percent of total sales. ADR opportunities grow with the Airport 4 Airport Dining & Retail Performance 2016 through Q3 % Change compared to Q3 2015 ADR Total Program Gross Sales $229.1million 11.6% ACDBE Gross Sales $48.2 million 5.5% % of Total ADR Program Gross Sales 21.1% (Defined by 49 CFR, Part 23) Small Business Gross Sales $55.2 million 8.6% % of Total ADR Program Gross Sales 24.1% (Small Business Standard used by U.S. Small Business Administration) Local Business Gross Sales $57.7 million 19.5% % of Total ADR Program Gross Sales 25.2% (Brand must be recognized by travelling public as from Washington State; and the business must be headquartered in Washington State, or major sales in Washington State) Total Gross Sales from Small, Local & Disadvantaged $102.1 million 14.3% Businesses % of Total ADR Program Gross Sales 44.6% Sales per Enplanement $11.86 4.7% Rank in U.S. Airports 2016 rank not yet available As reported by Airport Revenue News Employment (fulltime/part-time) 1,596/401 16%/57% End of year 2015 compared to end of year 2016 ADR Revenue to POS $38.5 million 11.9% Strong ADR performance and impacts 5 Outreach Update 625 firms registered on the ADR leasing website as of 12/31/2016. Hosted SeaTac Airport Business Opportunity Summit on 1/13/2017 to encourage small, local and disadvantaged business participation in the ADR Program - 168 attendees. Positive feedback on efforts to increase awareness of opportunities, to educate firms on doing business at the airport and to encourage participation. Outreach efforts have increased awareness, understanding and participation 6 Employment Continuity Pool Update Port contracted with Airport Jobs in July 2016 to: create an employee database assist in evaluation of needs and match qualified candidates facilitate interviews and track outcomes ADR and Airport Jobs have conducted first intake meetings with tenants including: Ken's Baggage Great American Bagel Bakery Butter London HMS Host Employment Continuity Pool is well underway 7 Lease Group 3 Update Lease Group 3: Commission authorized Lease Group 3 (12 opportunities encompassing 24 units) on June 14, 2016. Two opportunities are suspended, pending the rebid of the Central Terminal elevator and HVAC projects; one opportunity was given an extended deadline for proposal submittals (Nov 18, 2016) to incorporate 3 South Satellite units. 45 bids from 26 firms were submitted on September 22, 2016 for these 9 opportunities (17 units). Evaluation is underway with notification to proposing firms expected this month. Strong competition for Lease Group 3 opportunities 8 Lease Group 3 - Lessons Learned Ongoing outreach efforts played a role in more competition and increased participation by small, local and disadvantaged businesses. Significant progress in receiving better information about the quality of jobs. The scoring for joint ventures/meaningful partnerships was improved but there is more work to do. The external observers of the evaluation process provided valuable input. Proposers are sourcing more from local and small companies. Positive feedback on debriefing sessions for firms that proposed for Lease Group 2 opportunities. ADR Program is improving due to policy input and program refinements 9 Draft Lease Group 4 Opportunities Category Package # # of Locations (Unit #) Approximate sf Food &Beverage CEP F-1 1 (NS-3) 1,400 CEP F-2 1 (NS-1) 1,300 CEP F-3 1 (CT-18) 1,600 CEP F-4 2 (NE-4, CC-10) 1,450 CEP F-5 3 (HS-1, NE-3, CB-3A) 3,550 RFP F-6 4 6,000 (CA-13, BC-2, CC-11, CD-1) Retail CEP R-1 1 (CT-8) 1,500 CEP R-2 1 (CB-3B) 1,100 CEP R-3 1 (CT-9) 2,100 CEP R-4 1 (CT-16) 2,400 RFP R-5 5 3,200 (CB-1, CC-4, CC-9, HS-2, CT-25) New slate of opportunities is ready for the marketplace 10 Draft Lease Group 4 Opportunities Legend: Retail Food & Beverage Lease Group 4 opportunities are spread throughout the terminal 11 Established Evaluation Criteria Company Experience, Financial Capability: 20 points (13%) Concept Development: 25 points (17%) Unit Design, Materials and Capital Investment: 25 points (17%) Financial Projections and Rent Proposal: 20 points (13%) Management, Staffing and Environmental: 20 points (13%) Job Quality, Employment and Service Continuity: 20 points (13%) Small Business Participation: 20 points (13%) TOTAL POINTS 150 points (100%) Evaluation criteria help meet Commission priorities 12 Lease Group 4 Schedule Projected Date Action January 24, 2017 Brief Commission on lessons learned from Lease Group 3 and proposed leasing opportunities in Lease Group 4 February 14, 2017 Request Commission authorization to solicit proposals for Lease Group 4 opportunities Late February/Early March 2017 Advertise opportunities (leasing website and through various local and national media) March 2017 Tours and training sessions for interested businesses March through June 2017 90 days for proposal preparation June 2017 Responses due August 2017 Port Evaluation Team completes their decisions September 2017 Notification to preferred respondents Update Commission on Lease Group 4 results October/November 2017 Lease negotiations and executions Lease Group 4 ready for release 13 APPENDIX ADR Program Support for the Century Agenda The redevelopment of the ADR Program supports the Port's Century Agenda to create 100,000 new jobs. These opportunities also support a number of the Century Agenda strategies and objectives: Advance this region as a leading tourism and business gateway; Promote small business growth and workforce development; Be the greenest and most energy efficient port in North America. ADR advances the Century Agenda 15 ADR Evaluation Processes Competitive Evaluation Process (CEP) Simplified process for 1-3 unit opportunities Intended to reduce barriers to direct participation by small businesses Request for Proposal (RFP) Use for packages with 4 or more units or single units requiring large investments Geared toward large companies with small business participation Requires companies to submit more information and demonstrate greater financial capability Competitive process reflects Commission guidance 16 New slate of opportunities is ready for the marketplace 17 New slate of opportunities is ready for the marketplace 18 New slate of opportunities is ready for the marketplace 19 New slate of opportunities is ready for the marketplace 20 New slate of opportunities is ready for the marketplace 21 New slate of opportunities is ready for the marketplace 22 New slate of opportunities is ready for the marketplace 23 New slate of opportunities is ready for the marketplace 24 New slate of opportunities is ready for the marketplace 25 New slate of opportunities is ready for the marketplace 26 New slate of opportunities is ready for the marketplace 27
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