6b
PORT OF SEATTLE MEMORANDUM COMMISSION AGENDA Item No. 6b ACTION ITEM Date of Meeting December 8, 2015 DATE: December 4, 2015 TO: Ted Fick, Chief Executive Officer FROM: James Schone, Director, Aviation Business Development SUBJECT: Airport Dining and Retail (ADR) Lease Group Authorization ACTION REQUESTED Request Commission authorization for the Chief Executive Officer to conduct competitive solicitations and execute lease and concession agreements with selected proposers for ten new small business-oriented opportunities: (1) Single Unit #2 Food Service/Fast Casual; (2) Single Unit #6 Food Service/Casual Dining; (3) Single Unit #8 - Food Service/Gourmet Coffee; (4) Small Unit #16 Personal Services/Manicure (1 unit); (5) Small Package #6 Personal Services/Massage (2 units); (6) Single Unit #12 - Small Specialty Retail; (7) Small Package #2 Specialty Retail (2 units); (8) Small Package #3 Specialty Retail/Tech Products (2 units); (9) Single Unit #15 Specialty Retail; (10) Single Unit #14 Passenger Services - Baggage/Luggage Storage and Delivery. Unit and package numbers reflect how each is denoted in the ADR master plan. SYNOPSIS During the presentation at the Commission meeting on November 24, 2015 regarding opportunities associated with Lease Group #2, a component of the redevelopment of the ADR Program (Attachment A), Commissioners requested changes to the allocation of points to the criteria to be used in evaluating proposals for these opportunities. The request was to increase the amount of points allocated to the criterion labeled "Small Business Participation" as a means to support achieving the Commission's Century Agenda strategic goal of: "using our influence as an institution to promote small business growth and workforce development." In response to this request, Port staff proposes to increase the points allocated to the "Small Business Participation" criterion from 5 to 20 which represents 13% of the total 150 points to be used in evaluating proposals. The reallocation of points associated with this change reflects a balancing of the criteria that are important in selecting businesses that can be successful tenants in the ADR program at Seattle-Tacoma International Airport and thereby help the Port achieve its economic, community and environmental goals. BACKGROUND Leases for 90 percent of the Airport's restaurant, retail and personal services locations have begun to expire as they approach expiration in 2015-2017. Port staff has been working for the Template revised May 30, 2013. COMMISSION AGENDA Ted Fick, Chief Executive Officer December 4, 2015 Page 2 of 4 past four years to develop the ADR Master Plan, the tool to facilitate the re-leasing of these units in a manner that addresses increased passenger demand, best use of limited square footage and facility changes driven by terminal expansion while creating a more manageable number of lease expirations for the next redevelopment cycle. On December 9, 2014, the Commission authorized the first group (Lease Group #1) of lease agreements as part of the ADR master plan with HMS Host and Hudson Group. On November 24, 2015, Port staff presented the opportunities associated with Lease Group #2. The criteria proposed for the evaluation of proposals submitted for these opportunities and their respective point allocations as presented on November 24, 2015 were: Company Profile, Experience and Financial Capability 20 points Concept Development 25 points Unit Design, Materials and Capital Development 25 points Financial Projections and Rent Proposal 25 points Operations and Maintenance 15 points Management, Staffing and Workforce Training 20 points Job Quality, Employment and Service Continuity 15 points Small Business Participation 5 points TOTAL 150 points During the presentation, Commissioners requested changes to the allocation of points to the criteria. Specifically, Commissioners requested a greater emphasis on the criterion labelled "Small Business Participation." This emphasis was requested to support achievement of the Commission's Century Agenda strategic goal: "using our influence as an institution to promote small business growth and workforce development." In response to this request, Port staff proposes to increase the points allocated to the "Small Business Participation" criterion from 5 to 20 which represents 13% of the total 150 points to be used in evaluating proposals. This re-allocation was accomplished by reducing the points for the criterion labeled "Financial Projections and Rent Proposal" from 25 to 20 points, by reducing the criterion labeled "Management, Staffing and Workforce Training" from 20 to 15 points and by reducing the criterion labeled "Job Quality, Employment and Service Continuity" from 15 to 10 points. The point reduction for the job quality criterion is due to the fact that a number of the elements pertaining to Port of Seattle Commission expectations regarding quality jobs (November 25, 2014 - Commission Motion regarding Quality Jobs, Service and Employment Continuity Assurances for the Airport Dining and Retail Program) such as wages and paid time off are now required per the Washington State Supreme Court decision that tenants at Seattle- Tacoma International Airport must comply with the City of SeaTac's minimum wage requirements. Also, the evaluation of workforce training will be moved to the job quality criterion as workforce training is closely aligned with Commission expectations regarding quality jobs within the ADR program. COMMISSION AGENDA Ted Fick, Chief Executive Officer December 4, 2015 Page 3 of 4 The revised criteria and their respective point allocation for Lease Group #2, as well as all future opportunities competed via the Competitive Evaluation Process in subsequent lease groups are proposed as: Company Profile, Experience and Financial Capability 20 points Concept Development 25 points Unit Design, Materials and Capital Development 25 points Financial Projections and Rent Proposal 20 points Operations, Maintenance and Environmental Sustainability 15 points Management and Staffing 15 points Job Quality, Workforce Training, Employment and Service Continuity 10 points Small Business Participation 20 points TOTAL 150 points SCHEDULE The schedule has also been revised to reflect the new date for requesting Commission authorization. Projected Date Action December 8, 2015 Request Commission authorization of Lease Group #2 opportunities December 11, 2015 Advertise opportunities (leasing website, various media, event promotion) January, 2016 Tours and training sessions for interested businesses Mid December 2015 through Proposal preparation late February 2016 February 22, 2016 Proposals due to AirProjects April 7, 2016 AirProjects' analysis completed April 22, 2016 Port review of AirProjects' analysis and determination of awards Late April 2016 Notification to successful proposers Update Commission on Lease Group 2 results May 2016 Lease Negotiations and Executions COMMISSION AGENDA Ted Fick, Chief Executive Officer December 4, 2015 Page 4 of 4 ATTACHMENTS TO THIS REQUEST Attachment A: Commission Memo, 11/23/2015 PowerPoint presentation PREVIOUS COMMISSION ACTIONS OR BRIEFING November 24, 2015 Request for Airport Dining and Retail Lease Group Authorization August 4, 2015 Request for Airport Dining and Retail Group Lease Authorization February 24, 2015 (Staff Briefing) Airport Dining and Retail Outreach and Leasing Plans December 9, 2014 (Action) Authorization of Leases and Lease Modifications for HMS Host December 9, 2014 -- (Action) Authorization of Leases and Lease Modifications for Hudson Group December 9, 2014 (Action) Amendment to Lease and Concession Agreement with Anton Airfoods (dba Anthony's Restaurant) November 25, 2014 Commission Motion Regarding Job Quality September 30, 2014 (Staff Briefing) Drivers for Phasing Decisions May 27, 2014 (Staff Briefing) Airport Dining and Retail Master Plan September 11, 2012 (Briefing) Airport Concessions Master Plan Update February 14, 2012 Commission Motion Regarding Concessions Program Guidelines
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