PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA 
Item No.         6c 
Date of Meeting   October 13, 2009 
DATE:    September 18, 2009 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:    James R. Schone, Director, Aviation Business Development 
Jolene Culler, Senior Property Manager, Aviation Properties 
SUBJECT:  Amendment to Lease and Concession Agreements for Rental Car Companies 

REQUESTED ACTION 
Request for authorization for the Chief Executive Officer to execute an amendment to the Rental
Car Lease and Concession Agreement (Agreement) to extend the lease term for the rental car
companies operating at Seattle-Tacoma International Airport (Airport) until the opening of the
Consolidated Rental Car Facility (CRCF) and modify the Minimum Annual Guarantee (MAG)
requirements during this extended lease term. 
SYNOPSIS 
The CRCF will open in 2012. Until that time, it is necessary for the rental car companies to
continue their operations in their existing locations. To accomplish this, the existing lease must
be amended. 
Port staff seeks approval for a lease amendment to modify the lease term and MAG requirements
for the rental car companies operating at the Airport. When the current five-year (2004-2009)
Agreement was executed, it was based on an assumption that at the end of the term, the new
CRCF would be completed. However, since the CRCF is not scheduled to open until early 2012,
staff recommends holding over the current lease until that time. In addit ion, since the rental car
companies submitted bids based on a five-year lease commitment, staff recommends modifying
the MAG requirements as well. 
BACKGROUND 
In 2004, the Port initiated a competitive bid process to allocate floors one and two of the Airport
parking garage to the rental car companies. It was clear to all bidders that this space would not
be sufficient to accommodate all of the rental car companies that wanted to operate from the
garage. Any company that successfully bid for space in the garage would enjoy clear advantages
for attracting customers compared to those companies that would have to operate off Airport

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
September 18, 2009 
Page 2 of 5 

property. Another factor that played a role in the bidding was the expectation that the longplanned
CRCF would open near the end of this lease term. Thus, rental car companies saw an
opportunity to gain market share ahead of the move to the new facility as a way to influence the
allocation of space in the new facility. These factors led to a very competitive bid environment. 
Based on the bids, five (5) companies were granted full service concession Agreements that
allow them to operate counters in baggage claim and from allocated space in the parking garage,
and four (4) companies were granted limited service concession Agreements that allow them to
operate counters in baggage claim and from their own off-site rental car lots.
The norm throughout the airport rental car industry is that rental car companies pay 10% of their
gross revenues to each airport where they operate. Due to the competitive bid environment 
previously described, a number of the firms proposed MAG's that turned out to be significantly
higher than the standard 10% concession fee over the five-year life of their lease. As such, 
during these past 5 years, the Airport has received substantially more money, "a premium", from
several rental car firms than would normally be expected. For the Agreement Year November 1, 
2008 through October 31, 2009, this "premium" is estimated to total $4.2 million. 
Over the course of the past 5 years, a number of factors caused a delay in the opening of the
CRCF, now planned for early 2012. When Port staff realized the CRCF was not going to open in
time for a relatively seamless transition from one Agreement to the next, they discussed the
situation with the rental car companies and came to the conclusion that re-bidding and potentially
re-allocating the concession for operating in the garage for the short period of twenty-four to
thirty months would create numerous problems. It would cause serious disruptions to the
current rental car operation, would create significant tenant improvement costs for both the bid
winners and losers (and those tenant improvements would barely be finished before it was time
to move to the CRCF) and would take away needed focus from the CRCF project. A nother
factor is the expectation that a re-bidding within the current economic climate and the short 
timeframe before the opening of the CRCF would not result in "premium" MAG's such as the
Port has enjoyed during the current lease. Based on these factors, Port staff and the rental car 
companies agreed that holding over the current Agreement until the CRCF opened was the best
option. 
An extension of the lease term, however, created complications for the current structure of the
MAG. When the rental car companies submitted their MAG proposals in 2004, they only
expected to (and signed a lease that required them to) pay those MAG's for the original five-year
term of the lease. As previously mentioned, several of the rental car companies initially bid
MAG's that turned out to be substantially in excess of 10% of their gross revenues in order to
secure a full service concession in anticipation of the move to the CRCF. The rental car
companies would not agree to continue paying those MAG's in the holdover period.
The resulting negotiations between the Port and the rental car companies led to the proposed
revision to the existing Agreement which provides some relief to those companies that bid

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
September 18, 2009 
Page 3 of 5 

MAG's significantly higher than 10% of their gross revenues. This relief essentially results in
fees paid to the Airport that are in line with the fees more normally paid throughout the airport
industry. The proposed language states that for each agreement year of the extension term, the
MAG shall not exceed the percentage fee that the rental car company otherwise would have paid
(10% of gross revenues) for the agreement year commencing November 1, 2008 and ending
October 31, 2009  the last year of the current lease term. The Port will still, however, enjoy the
upside associated with any increase in the rental car companies' gross revenues through the
percentage fee. The change is designed to eliminate only the "premium" portion of the MAG bid
by several of the companies for what those companies understood was a five  not nearly eightyear
term. 
SCOPE OF AGREEMENT 
The Port would enter into a lease amendment (attached as Exhibit A) to the Agreement (attached
as Exhibit B) with each of the rental car companies to make the following modifications: 
Term/Effective Date:      Extend term from November 1, 2009 until the opening date of the
CRCF. 
MAG:            Notwithstanding Section 5.1.1.2 of the Agreement, for each
Agreement Year of the Extension Term, the Minimum Annual
Guarantee shall be the lesser of: (i) an amount equal to eighty
percent (80%) of the total amount (whether by Minimum Annual
Guarantee or Percentage Fees) paid or payable by Concessionaire
to the Port for the previous Agreement Year or the Minimum
Annual Guarantee for the first Agreement Year set forth in Section
5.1.1.1 of the Agreement, whichever is greater, or (ii) ten percent
(10%) of Concessionaires Gross Revenues for the Agreement Year
commencing November 1, 2008 and ending October 31, 2009. 
Note: Section 5.1.1.1 of the Agreement establishes the MAG for 
each rental car company based on the individual bids submitted. 
Note: Section 5.1.1.2 of the Agreement states: For the second and
each subsequent Agreement Year, the Minimum Annual Guarantee
shall be an amount equal to eighty percent (80%) of the total
amount (whether by Minimum Annual Guarantee or Percentage
Fees) paid or payable by Concessionaire to the Port for the
previous Agreement Year or the Minimum Annual Guarantee for
the first Agreement Year set forth in Section 5.1.1.1, whichever is
greater.

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
September 18, 2009 
Page 4 of 5 

All other terms and conditions of the Agreement will remain unchanged. 
STRATEGIC OBJECTIVES 
This proposal supports the strategy of "Ensuring Airport and Seaport Vitality" by ensuring
business viability for the rental car concession business at the Airport. 
ALTERNATIVES CONSIDERED/RECOMMENDED ACTION 
Alternative 1: Do Nothing 
The Agreement with the rental car companies will expire on October 31, 2009. There will be
no rental car operators in place, which will mean the loss of significant revenue for the Port
in 2010, as well as the loss of a critical customer amenity. This is not a recommended
alternative. 
Alternative 2: Re-Bid and Re-allocate the Parking Garage 
If the Port were to initiate a bid process to re-allocate the garage, it would take a lot of time
and money from both the Port and rental car companies. The first and second floors of the 
garage are configured based on the 2004 bid. A new bid would mean the space would have
to be re-allocated, triggering extensive modifications to the first floor lobby and layout of the
floors. Both the Port and the rental car companies believe that the costs and disruption
caused by this approach does not provide enough benefit. This is not a recommended
alternative. 
Alternative 3: Extend Lease Until the CRCF Opens and Modify the MAG's 
Extending the lease until the CRCF opens while providing modest MAG relief is the
preferred approach. This alternative allows operations at the Airport to continue without
disruption and ensures that the rental car companies and Port staff can focus their efforts on
completing the CRCF. This alternative provides the most benefit to the Port and the rental
car companies. This is the recommended alternative. 
FINANCIAL IMPLICATIONS 
Several of the rental car companies initially bid MAG's substantially in excess of 10% of their
gross revenues in order to secure a full service concession in anticipation of the move to the
CRCF. However, those rental car companies only expected to pay that "premium" MAG for the
original five-year term of the Agreement. Should the Port decide to re-bid the concession, given
the current economy it is doubtful the same bidding "premiums" that occurred in 2004 would be
replicated. Re -bidding the concession would also burden the Port with the expenditures
associated with executing a competitive bid process and the costs of re-configuring the garage. 
The proposed amendment will bring the percentage fees paid by the rental car companies at the
Airport back in line with fees normally paid throughout the airport industry. Based on projected

COMMISSION AGENDA 
T. Yoshitani, Chief Executive Officer 
September 18, 2009 
Page 5 of 5 

rental car industry gross revenues during the period November 1, 2008 through October 31,
2009, it is estimated the Port will see a reduction in MAG's of approximately $3.5 million in the
first holdover year.
ECONOMIC IMPACTS 
The Rental Car Companies employ hundreds of full and part-time employees. The proposed
amendment to extend the terms of the lease helps ensure that these Airport-related jobs are
secure. 
PREVIOUS COMMISSION ACTION 
May 13, 2008, the Commission authorized execution of the new Consolidated Rental Car
Facility lease.