Port Commission Regular Meeting
of November 25, 2014
9              Minutes Exhibit A
U'S' Department
Federal Aviation Administration                      Civil Rights ofce, Awp.9
0f T'Onspormon
Western-Pacic Region                              15000 Aviation Blvd.
Federal Aviation                                                         Lawndale, CA 90261
Administration


December 31, 2012


Gael Tarleton, Commissioner
Rob Holland, Commissioner
Port of Seattle
PO. Box 1209
Seattle, Washington 981 11-1209

Dear Commissioners:

This is in regard to your letter dated September 28, 2012,
as well as to the SeaTac Small
Business Association's letter dated October 31, 2012.  Both letters request the Federal Aviation
Administration (FAA) to provide guidance
on a Proposed Substitute Motion, as amended,
Regarding Airport Concession Disadvantaged Business Enterprises and Other Small Business
at
Seattle-Tacoma International Airport dated September 11, 2012.   The Port of Seattle
Commission (Commission) passed this motion directing the Seattle-Tacoma International
Airport (SeaTac) to undertake efforts to extend current leases
or negotiate new leases with
certain Airport Concession Disadvantaged Business Enterprise
(ACDBE) firms.
The FAA commends the Commission's commitment to
ensure that SeaTac implements and
maintains an ACDBE program in accordance with 49 CFR Part 23, Participation
of
Disudvzmlaged Business Enterprise in Airport Concessions. We reviewed the proposal passed
by the Commission, dated September 11, 2012. Our initial review is limited to the documents
you have presented and is without the benet of input from concessionaires that may be directly
affected by this proposal. We have several
areas of concern with the overall proposal and
anticipate that entering into leases based on this proposal could subject the Sponsor to
a formal
complaint under 14 CFR Part 16 (Part 16), Rules ofPracticefor Federally Assisted Airport
Enforcement Proceedings. In the event a Part 16 complaint is led, the FAA will have the
opportunity to review all sides of the issue through formal pleadings and the nal
agency
decision could be signicantly more restrictive than the
concerns outlined in this letter. The
following represents a summary of our initial concerns with respect to 49 CFR Part 23:

1)  Section 2 ofthe Proposal may violate 49 CFR, Sections 23.45(e) and 23.51(a)(b), by
establishing an aspirational 30% ACDBE goal without the required description of the
methodology used to calculate the goal and without demonstrable evidence of the
availability of ready, willing and able ACDBEs relative to all ready, willing and able
businesses available to participate in the SeaTac's ACDBE
program.

2)  Section 3 of the Proposal may violate 49 CFR Section 23.61 by establishing
a quota
and/or a set-aside for concessionaire leases by requiring SeaTac to extend
or enter
into new leases for current ACDBE and other small businesses
as direct tenants.

3)  Section 3 of the Proposal may violate 49 CFR Section 23.79 by requiring SeaTac to
increase the number of direct tenants, especially small locally-owned businesses. A
local geographic preference is not permitted in the ACDBE
program.

4)  Section 3 of the Proposal may violate Federal Airport Improvement Program (AIP)
Grant Assurance #24, Fee and Rental Structure depending
on the lease structure.
Assurance #24 requires the airport to maintain a fee and rental structure that will
make the airport as self~sustaining as possible under the circumstances existing
at the
particular airport. The FAA's Policy and Procedures Concerning the Use ofA irport
Revenue (64 FR 7696; February 16, 1999) reiterates this requirement and interprets
this assurance to require that the airport receive fair market value for non-aeronautical
facilities and services. The airport tenants identied in the pending State legislation
as concessionaires are non-aeronautical in nature, and as such, must
pay fair market
value commercial rates for their airport property.

FAA strongly recommends that the Commission review the motion passed on September 1 1,
2012, and take appropriate action to ensure compliance with the ACDBE
program. As we stated
above, this represents our initial concerns with the documents
we have reviewed and does not
represent a nal agency decision.  In addition, this response does not bind the FAA to
any
particular resolution in the event that a complaint is led regarding the issues addressed herein.

If you have any questions, please contact
me at (310) 725-3948, or via email at
michael.t'reilich@faa.gov.

Sincerely,
MW
us.
Michael D. Freilich, Director
Civil Rights, Westem-Pacic Region
& DBE Compliance

cc:   ACR-l
ACR-4
JoAnne Robinson, DOT Office of the General Counsel
Kathryn M. Vernon, ANM-OO]
David Suomi, ANM-002
Patricia Deem, AGC-620
Joelle Briggs, ANM-620
Peter Doyle, SEA-ADO
Mark Reis, CEO SeaTac
Deanna Zachrisson, ACDBELO SeaTac
SeaTac Small Business Association

_ PO. Box 1209
- sin .WA 931111209
Port_                   Tsizeoenze-aooo
Of seattle                                    www.ponsealtle.org

September 28, 2012


Mr. Robert C. Ashby
Deputy Assistant General Counsel for Regulation
US Department of Transportation
Office of the General Counsel
1200 New Jersey Ave., SE
Washington, DC 20590

Dear Mr. Ashby:

We are seeking the guidance of the Federal Aviation Administration on a matter related to the Port of
Seattle Commission's interest in encouraging fair and appropriate participation of Disadvantaged
Business Enterprises in the concessions program at Seattle-Tacoma International Airport.

The Port Commission has had a long-standing commitment to the ACDBEs at SeaTac, In addition to our
commitment to achieving the FAA-approved participation goals, we have stayed vigilant as to the impact
on the ACDBEs of changes in the economy and activity levels at SeaTac.

On September 11, 2012  the Commission passed the enclosed motion, directing the staff to undertake
,
efforts to extend current leases or to negotiate new leases with ACDBEs. The Commission also created a
temporary Commission Committee, of which we are the two members, to oversee implementation of
the motion.

As you will note in section 3, the Commission conditioned any lease extensions or new leases on their
permissibility "by Federal Regulations." In Section 6, the Commission specifically directs our Committee
to "seek guidance from the Federal Aviation Administration as to the terms allowable under Section 5."
Based on the several sections of the Motion, we interpret the "terms allowable" to refer to the many
elements or factors associated with lease negotiation, including ACDBE eligibility, the nature of the
actual lease terms, and the impacts of possible new leases on the airport's ability to attract new direct
tenants.

With this letter, we are formally requesting the guidance of the FAA as to the appropriateness of the
policy direction, and the Port's implementation, of the Motion. We would suggest that Mr. Paul
Bintinger, Senior Port Counsel, be your initial contact on this matter.  Mr. Bintinger can be reached at
206-787-3335 or at Bintinger.p@portseattleorg.

We want to thank you in advance for all of your assistance and respectfully request your expedited
review of and guidance on this matter.

Sincerely,



Gael Tarleton                                          Rob Holland
Commissioner                                    Commissioner

Cc:      Kurt Beckett
Craig Watson
Mark Reis
Deanna Zachrisson
Jim Schone
Mary Gin Kennedy

Enclosure - September 11,2012 ACDBE Commission Motion