The Port of Seattle and
Airport Concessions Disadvantaged Business
Enterprises (ACDBEs)

The Port of Seattle operates a successful ACDBE program as part of the overall Dining and Retail program
at Seattle-Tacoma International Airport. Airport Dining and Retail (ADR) generates nearly $200 million in
annual sales and supports more than 1,600 airport jobs. Sea-Tac's dining and retail program has been
recognized as a success by the aviation industry, tenants and the traveling public. The offerings are
regularly included in 'best of' lists of airport dining and retail and have been held up for recognition for the
program's efforts to promote inclusion. 
In 2013, ACDBE sales totaled $43.1 million from 16 ACDBE tenants, which equated to 20.5% of the total
Airport Dining and Retail sales at Sea-Tac. This exceeded the FAA approved goal of 19.56% for the period
from 2011-2014. For the fiscal year 2012-13, Sea-Tac's ACDBE's participation in gross sales breakdown
was: African-American - $13.4 million, Asian-Pacific - $13 million, and Women - $16.7 million. The new plan
for 2014-17 has raised the goal to 21.2% of total sales and Sea-Tac is well on its way to achieve this goal
with the addition of three new ACDBE's and the continued record numbers seen in airport sales.
Regular Audit Reports 
Regular audits of the ACDBE program are conducted by the FAA to ensure compliance to Program
guidelines and Title VI of the Civil Rights Act. In the most recent 2013 Title VI audit, the FAA found no
actions required as part of this audit.
In addition, a 2014 audit report of 64 U.S. airports by the Office of the Inspector General of the U.S.
Department of Transportation specifically mentioned Sea-Tac's success in unbundling large contracts. It
notes "the Seattle airport directly contracted or leased to over 20 disadvantaged firms since 2005" and
noted further that "direct award or leasing can be the most effective means for bringing new ACDBE
participation to an airport." 
Inaccurate reports about a low ranking from the OIG report failed to note that the exhibit ("C") in the back
of the audit put Sea-Tac 59th out of 64 airports, not as a ranking, but rather as an alphabetical listing of
airport names. More substantively, the report notes that 33 out of 64 airports had no new DBE or ACDBE
contracts in the one year reviewed, 2012 (this includes such major airports as Dallas/Fort Worth, Denver
and Newark, as well as Seattle). The report noted this "does not indicate a lack of support for DOT's
DBE/ACDBE program" as those airports did not have contract opportunities during that year as contracts
were signed during previous years. With 90% of Sea-Tac's leases expiring in the next 2 years, there will be
significant new opportunities.

Opportunities for All 
Sea-Tac Airport's ADR program redevelopment in 2004/5 shifted the airport's offering of restaurants
and shops from one major concessionaire for the entire airport to a leasing structure of large operators
of multiple units and direct leases with independent operators. This brought about an open bid process
for spaces during the central terminal renovation in 2005. During the next few years, those leases will
expire providing new open bid opportunities and a renovation of airport space is projected to nearly
double sales and increase jobs by 40% by 2025.
Suggestions that minority firms have been forced out by Sea-Tac are not true. One African-American
Burger King owner was in default for non-payment of rent and contributions to union employee health
and welfare benefits. The African-American tenant who sublet that space to the defaulted business
owner ultimately terminated the sublease and evicted the subtenant. Another false assertion claimed an
ACDBE tenant went out of business due to the arrival of McDonald's. The entrance by McDonald's to
Concourse B was not the cause of this business's struggles. In fact, the business's monthly sales were
relatively stable after the introduction of McDonald's in June 2013 but ended the year with a 3.4%
decrease in sales. Through September of 2014, however, there were staffing and inventory problems,
which resulted in a 30% loss in sales. During this same period, every other Concourse B food location has
experienced sales increases between 15%-41%.
It is also worth noting that one of the most successful businesses in the central terminal is Wendy's, an
African-American family-owned business with sales of $3.8 million in 2013. Despite feeling the most
direct competition from McDonalds, it felt little impact from the introduction of McDonald's. 
From a rent standpoint, all tenants pay rent as a percentage of gross sales. Some leases provide lower rent
based on branded restaurants or services which require the franchisee to pay additional fees of between 2
to 10% to the franchisor for the use of the brand name product. Businesses operating their own brand (as
is the case for some of the ACDBE tenants) do not have to pay these franchise fees.
The Host subtenant ACDBEs received significant rent relief and two year lease extensions in 2005. This
relief was provided in tiers over the term of the lease. For much of the lease term, the ACDBEs paid
significantly less rent than their lessor, Host. An analysis in early 2013 showed that of all food service
tenants regardless of rent schedule (category, tiered or flat) paid similar percentage rent, 12.5-13%.
Tenants serving high-margin alcohol pay somewhat higher rent, about 15%. References to some paying
"half as much rent" is likely referring to Anthony's current 8% flat rent. However, as an anchor tenant for
the central terminal, they had very high investment costs in a location that was at the time unproven,
serves fresh cooked food with glassware and silverware rather than plastic and has daily operational costs
far exceeding those for other food and beverage units. The location has proven to be the highest grossing
restaurant in any U.S. airport.
Changes in Use of Port Dining and Retail Spaces 
The Port plans to change the use of some dining and retail space once current lease agreements expire.
These spaces will be open to competitive bid. As in any open bid process, no current tenant has a spot
reserved going forward and all spaces will be open for bid to provide the services in demand. Travelers
will see some spaces with new services in old locations or the same offering in a new location. It is all
meant to meet passenger needs in every area of the airport to include food service, convenience retail
and services. The opportunities will be exciting!