COMMISSION 
AGENDA MEMORANDUM                        Item No.          10a 
ACTION ITEM                            Date of Meeting      October 26, 2021 

DATE:     September 22, 2021 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Dawn Hunter, Director, Aviation Commercial Management 
Matthew Eng, Senior Business Development Analyst/AV 
SUBJECT:  Lease and Concession Request For Proposal for Duty-Free Operations at Seattle-
Tacoma International Airport 

ACTION REQUESTED 
Request Commission authorization for the Executive Director to (1) issue a Request for Proposal
to select a vendor for Duty Free Operations and (2) to execute a concessions agreement with the
selected duty-free operator at Seattle-Tacoma International Airport .
EXECUTIVE SUMMARY 
The Seattle-Tacoma International Airport (Airport) views the duty-free business as one with
significant non-aeronautical revenue growth opportunities. This is especially important as the
traditional sources of non-aeronautical revenue, such as parking fees, decrease. With the
addition of international gates on Concourse A and the planned renovation of the South Satellite,
modifications and expansions to the duty-free locations along with the selection of a new vendor
are essential in leveraging this source of non-aeronautical revenue. It is anticipated that by Q4
2024 the duty-free space at the Airport will increase from 6,700 sq. ft. to over 15,000 sq. ft. 
Duty-free operations at the Airport encompass more than just duty-free sales of alcohol and
tobacco to international travelers. Duty-free shops also offer duty paid or 'travel value' priced
merchandise such as cosmetics, perfume, luggage, handbags and other premium brand name
products available for sale to savvy domestic travelers and even Airport employees. Additionally,
Airport duty-free shops offer local retail gift merchandise that appeals to both the domestic and
international traveler such as jewelry and confectionary. 
Commission approved a temporary duty-free  agreement with the current operator on
September 14, 2021. Having the temporary agreement in place allows for a smooth transition
while providing a continuous passenger experience. 

Template revised January 10, 2019.

COMMISSION AGENDA  Action Item No. 10a                                 Page 2 of 4 
Meeting Date: October 26, 2021 
The proposed timeline for the selection of the duty-free operator aligns with the design,
construction, and completion of the proposed Duty-Free Expansion on Concourse A. 
DETAILS 
Additional duty-free space is needed as the current allocated space has never been able to
adequately accommodate the square footage needed within the duty-free locations to maximize
non-aeronautical revenue. The increased space is also needed to allow the new operator to
provide the square footage required by higher end brands for designated merchandising space
within the duty-free footprint. 
The 2016 Airport Dining and Retail (ADR) Master Plan did not address airport wide amenities like
duty-free, luggage carts, vending, and currency exchange. In assessing these amenities, staff
acknowledged the overall lack of duty-free space at the Airport. 
However, during an assessment additional duty-free space was identified on Concourse A, which
would increase duty-free square footage by approximately 9,000 sq. ft. In addition to the
Concourse A Expanded Duty-Free project, it has been determined it is necessary to create a 
project to upgrade the South Satellite (SSAT). The upgrade to the SSAT would revamp the small
duty-free space and create an expanded offering for international passengers within that
concourse.
In 2018, staff also determined that the Airport would not release an RFP for duty-free. The
rationale  for  this  decision  was  that  there  was  not  enough  information  to  develop  a
comprehensive RFP that would yield the financial terms viable to the Port. Moreover, the Project
Definition Documents (PDD) were not fully developed at that time to allow the bidding firms the
information required to present the best designs, as information pertaining to total square
footage and base building layout are essential to a successful RFP. Combining the PDD effort with
the release of the RFP represents a more cohesive approach to presenting interrelated items. In
addition, the RFP will outline design and construction requirements and/or expectations the Port
will require from successful duty-free operator. This will include any base building work that
would be a part of a tenant reimbursement.
To effectively meet the Airport's current and future demands within the existing terminal
footprint, the Airport must engage in thoughtful planning during the project definition phase. It
is important to have the duty-free operator and their design team working in tandem with the
concept development of the space to assure a better end product.
This project combined with the duty-free in the SSAT renovation project, will meet the passenger
demand for duty-free. 


Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. 10a                                 Page 3 of 4 
Meeting Date: October 26, 2021 
JUSTIFICATION 
Currently, there is only 6,716 sq. ft. of duty-free space at the Airport, which encompasses a
combination of locations in SSAT, Concourse A, and Concourse D. Compared to ASQ Large Hub
airports, the Airport ranks 15 out of 22 airports total in providing adequate duty-free space per
enplanement. The Airport also ranks 13 out of 22 airports in overall duty-free space. Duty-free
operators are different from other airport retail in that they offer higher value goods for sale. 
Passengers departing on international flights frequently purchase higher end brands (e.g., Dior,
Versace, Luis Vuitton, Burberry, Hermes, etc.), liquor, cigarettes, and high-end accessories prior
to their departing flights because they do not have to pay taxes on the items that are leaving the
country. Since most of their inventory is more expensive than typical airport retail, the revenue
generated per square foot of space is usually significantly higher than other spaces. 
The existing duty-free units do not provide adequate space for current passenger demand, let
alone additional demand expected once the International Arrivals Facilities (IAF) opens. Creating
this large walk-through duty-free retail experience directly supports the Port's dedication to
financial sustainability and advances the Airport as a leading tourism destination in the global
marketplace. Additionally, the contract will include specific square footage dedicated to
Women/Minority owned Business Enterprises (WMBE) / Small Business opportunities within the
Duty-Free footprint. 
The Airport currently makes 50% less duty-free non-aeronautical revenue than comparable U.S.
Airports.
Diversity in Contracting 
The ADR program is governed by the Federal Government and will include Airport Concessions
Disadvantage Business Enterprise (ACDBE) participation and/or WMBE participation by nature of
the design. 
DETAILS 
This project will require arrangements to relocate existing tenant leases, including
potential agreement buy out terms (Q2 2023). Additional Commission action to discuss
cost of buyouts may be required. 
Staff will explore the opportunity for a Tenant Reimbursement arrangement with the new
duty-free provider to potentially complete base building changes. 




Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. 10a                                 Page 4 of 4 
Meeting Date: October 26, 2021 
SCHEDULE 
Conceptual Planning                          Completed 
Project Definition Document                   Phase 1: Concept Refined 
Phase 2: 15% Design 
Duty Free Vendor RFP Authorization           Commission Authorization for Vendor RFP
October 26, 2021 
Design                                        Commission Authorization for Design (Target
Q3 2022 
Duty Free Vendor Awarded                   Target Q4 2022 
Building Construction                           Commission Authorization for Construction
(Target Q3 2023) 
Activation                                       Target Q3 2026 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Staff is recommending the second, preferred alternative described below. 
Alternative 1  Negotiate a new contract with the current Operator.
Pros: 
(1)   Doesn't require the Port to undergo the RFP process. 
(2)   Staff  and  base  building  designer  could  start  interacting  with  current  tenant
immediately. 
Cons: 
(1) Inhibits the process of fair competition. 
(2) Port will not get the benefit of competitive design to best meet our needs. 
This is not the recommended alternative. 
Alternative 2  Issue a competitive bid for the Duty-Free Operator. 
Pros: 
(1)   Allows for fair competition. 
(2)   Creates additional opportunities for new WMBE and ACDBE businesses. 
(3)   Allows the Port to receive the desired design through the competitive process. 
Cons: 
(1)   Project team will need to wait until the competitive process is completed to engage the
operator. 
This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
(1)   Presentation slides 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None 

Template revised June 27, 2019 (Diversity in Contracting).