COMMISSION 
AGENDA MEMORANDUM                Item No.       6g 
ACTION ITEM                   Date of Meeting   November 22, 2016 
DATE:    October 28, 2016 
TO:     Ted Fick, Chief Executive Officer 
FROM:   Julie Collins, Senior Director, Public Affairs 
James Schone, Director, Aviation Business Development 
Scott Van Horn, Senior Manager, Airport Dining and Retail 
SUBJECT:  Competitive Solicitation for the Airport Advertising and Promotion Concession 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to conduct a competitive
solicitation and execute a lease and concession agreement with the selected proposer for the
right for an advertising and promotion concession at Seattle-Tacoma International Airport for a
period of ten years. 
EXECUTIVE SUMMARY 
Seattle-Tacoma International Airport has an important role as the place we welcome visitors to
our region and share our civic pride. This advertising request for proposal (RFP) offers a unique 
opportunity to advance a variety of Port objectives: 
Sustain and grow advertising revenues; 
Upgrade electronic displays to accommodate digital advancements in advertising styles
and methods; 
Enhance the Port'seconomic development abilities through partnerships  with local
communities and non-profit economic development organizations; 
Instill a "Northwest Sense of Place" through local tourism promotion, scenic
photographs, special displays and local offerings; 
The advertising program at the Airport is a critical piece of the overall generation of nonaeronautical
revenue accounting for 2.7% of total Airport Dining and Retail (ADR) gross sales
($7.3 million of the $271.5 million) and 11% of ADR revenue to the Port ($5.0 million of the
$44.7 million) in 2015. The advertising program brings public awareness to businesses located
within the Pacific Northwest as well as national brands. The current advertising concessionaire
employs two local employees and utilizes local contractors for electrical work, installation, and
other services to support the program. 
The last solicitation for the advertising program at the Airport was conducted in 2007. During
this ten-year period, there have been many changes to advertising mediums, from digital

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COMMISSION AGENDA  Action Item No. 6g                       Page 2 of 9 
Meeting Date: November 22, 2016 
displays to social media campaigns. In this new solicitation, staff is looking to capitalize on
these changes while also improving the look and feel of the advertising program by: 
Upgrading older displays and equipment with newer technologies; 
Reallocating a number of existing static locations to digital displays; and 
Providing additional locations within the concessionaire's inventory for non-static/digital 
display elements as well as promotional activities e.g., credit card booths, kiosks, etc. 
This proposed agreement is for 10 years, same as the current agreement, in order to provide
sufficient opportunity for the lessee to amortize the capital investments that the Airport is
requesting. 
Additionally, the Port is looking to enhance its ability to promote economic development
through the allocation of a fixed number of advertising locations in the Airport for its own use
or by communities in Washington State and non-profit organizations focused on economic
development. This will be done through a combination of Port-controlled inventorylocations 
that will be paid for by the Port and/or other organizations selected by the Port at market rates,
the use of unsold advertising "filler" spots, cultural and historical exhibits, and the use of
photographs on construction barricades. 
Staff is recommending the release of the solicitation at this time in order to provide adequate
time for a transition between the new advertising concessionaire and current operator (if the
current operator is not chosen as the preferred respondent through the competitive process). 
JUSTIFICATION 
The current 10-year advertising agreement with Clear Channel will expire on July 31, 2017.
Clear Channel was awarded this agreement through a RFP process that was conducted in 2006-
2007. The current agreement does not include any provisions for term extensions or options.
The range for airport advertising agreement term lengths is 5 to 10 years. Longer terms are
usually driven by a need for larger capital investments, thereby allowing sufficient time to
amortize the investment. In the case of this Airport, there are multiple factors behind the
proposed 10 year lease term: the sizeable capital investment requested for the new digital
displays, as well as capital investment needed for the new North Satellite and South Satellite
upon their completion. The lessee will also be required to do a mid-term refresh of their
display units (credit card booths or other fixtures), sign frames, as well as maintain all digital
network hardware (screens, computers, etc.). 
The current advertising program includes 174 locations throughout the Airport of which the
majority are a still photo on a poster inside a glass case known as static advertising displays.
There are also several digital displays that show videos such as those located on the baggage
carousels in baggage claim. In addition, the program allows for advertisers to have interactive
displays for their products or services in key locations throughout the Airport. In the 10 years

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COMMISSION AGENDA  Action Item No. 6g                       Page 3 of 9 
Meeting Date: November 22, 2016 
since this agreement was signed, the advertising industry has moved toward the use of video
monitors to display static, video, and interactive touch screen messages. In addition, the
industry is emphasizing sponsorship and promotional events for specific products or services. 
The financial performance metrics for the past three calendar years and through Q3, 2016 for
this agreement are as follows: 
Advertising annual sales: 
o  2013 - $3.9 million 
o  2014 - $6.8 million 
o  2015 - $7.3 million 
o  2016 - $5.6 million (Q3) 
Advertising annual revenue to the Port of Seattle (Port): 
o  2013 - $2.7 million 
o  2014 - $4.8 million 
o  2015 - $5.0 million 
o  2016 - $4.7 million (Q3) 
DETAILS 
Program Description 
The purpose of the lease and concession agreement is to generate non-aeronautical revenue
for the Airport. The advertising program also supports the Century Agenda goal of advancing
the region as a leading tourism destination and business gateway. 
Locations included within this solicitation for advertising, sponsorship, and product/service
promotions are in the Airport's terminal buildings, sky bridges, jet ways, and parking structures.
This solicitation does not include any billboards on the roadway systems. 
Technology Requirements 
As the median age of the Airport passenger becomes younger (in 2015, 60% of the Airport's
passengers were younger than 50 years old) the look, feel, and delivery methods of the
advertising messages should be updated. While it is cost-prohibitive to convert all advertising
locations to a digital-based network, the Port has identified 14 locations where new digital
displays will be added to the inventory. Furthermore, the preferred respondent may identify
additional static inventory locations in the Airport where digital displays are warranted. This
allows for a greater number of opportunities for companies wishing to have an advertising
presence at the Airport. 


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COMMISSION AGENDA  Action Item No. 6g                       Page 4 of 9 
Meeting Date: November 22, 2016 
Community Promotional Opportunities 
As the first welcome gateway for thousands of annual visitors, Sea-Tac provides a unique
opportunity to promote tourism locally and across the state. Efforts are underway to identify a
number of suitable locations where the Port can partner with neighboring communities and
non-profit organizations with historical, cultural and trade/commerce programs to promote
their respective interests in the Airport. As this program is being developed, the Port is mindful
of the U.S. Federal Aviation Administration (FAA) revenue use policy. In general, airports are
prohibited from using airport revenue for general economic development or for marketing and
promotional purposes unrelated to airports.  With this requirement in mind, staff has
developed the following recommendations to include in this Advertising RFP, as well as other
opportunities not directly associated with the RFP: 
Allocate up to 10% of the advertising locations (17 of 174) for use by the Port for its own
economic development purposes. 
These locations will be selected based primarily on their suitability for capturing the attention
of deplaning passengers. The Port will use these ad locations for either its own purposes or for
sale to communities/non-profit organizations.  The  Port (using non-airport funds) or the
community/non-profit trade groups will pay the Airport Development Fund for use of these
advertising locations at the same rate as the concessionaire  is paying for its exclusive
inventory. As new airport facilities are built during the term of this agreement, the Port will
have the right to add up to 10% of whatever new locations are added to the advertising
inventory for its own use. 
If the Port does not use or sell these advertising locations, the Port will offer these to the
concessionaire at the same concession fee rate proposed in the bid for similar locations. 
Port staff (Public Affairs and Tourism) will be responsible for the allocation of these advertising
locations as well as the content in them be they used by the Port or community and non-profit
economic development organizations. 






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COMMISSION AGENDA  Action Item No. 6g                       Page 5 of 9 
Meeting Date: November 22, 2016 
Include the right of first refusal in the lease to use "filler" or unsold advertising inventory: 
The agreement would include a clause stating that should the concessionaire have any
unsold advertising inventory, the Port would have the right of first refusal for its use or
use by communities/non-profit organizations. 
The Airport will receive revenue from this inventory as the concessionaire remains
obligated to pay the Minimum Annual Guarantee for unsold advertising inventory.
o  Examples of messages for these filler spots could include: 
Visit (city name) 
Explore Washington Wine Country 
Welcome convention attendees (5,000 delegates or more) 
It is important to note that messages in these locations will be up for only that period of
time before the location is sold to a regular advertiser, and it is unpredictable as to
when these locations will be available. 
The communities and/or non-profit organizations would be responsible for all costs
associated with the production and placement of these advertisements. 
Port staff (Public Affairs and Tourism) would be responsible for approving the content of
these advertisements. 
Communities or industries may purchase advertising: 
A community or non-profit economic development organizations may also purchase advertising
inventory from the advertising concessionaire.
In all circumstances, the ad content must comply with the Airport's advertising policy as
outlined in the Rules and Regulations (Exhibit A). 
Other non-advertising promotional opportunities: 
Although this will not be part of the inventory for the Advertising RFP, there are other
promotional opportunities for the Port, neighboring communities, as well as non-profit
organizations with historical, artistic, cultural and trade/commerce programs, through use of
the temporary exhibit component of the Port's Art Program as well as temporary construction
barricades. 
Art Program 
Those communities and non-profit organizations that have exhibits that are historical, cultural,
artistic and trade/commerce- themed, may seek approval to install these exhibits in the Airport
through the Art Program. The exhibit and all artifacts associated with the exhibit are to be

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COMMISSION AGENDA  Action Item No. 6g                       Page 6 of 9 
Meeting Date: November 22, 2016 
provided by the sponsor of the exhibit and must comply with the Temporary Exhibit Guidelines
(Exhibit B). 
Examples of exhibits include: 
o  Aviation history in the state 
o  Wine growing regions of Washington State 
o  Ethnic heritage celebrations 
Temporary construction barricades 
Messages on temporary construction barricades are intended to educate the traveling public
about new concessions, airline services that are available to the public, or other public services
that are coming soon. Should a tenant not wish to promote its business on the barricade, the
Port may use this location for photographs only. All photographs must be non-commercial in
nature. 
Public Affairs is working closely with Aviation staff (Airport Dining and Retail, Customer Service,
Operations) and Economic Development Staff (Tourism) to bring together these various
signage, advertising and display opportunities into a cohesive program. 
Authorization Approach 
This opportunity will be competed via the RFP process with award being made to the firm that
offers the best value to the Port. Consistent with the Century Agenda, the Port will include a
small business component and evaluate the proposer's commitment to utilization of small
businesses.
Evaluation Criteria 
The following criterion will be evaluated.
Company Profile, Experience and Financial Capability                    10 points 
The company must demonstrate stability, experience and expertise in operating a similar lease
and concession agreement as proposed, in a similar environment.  The proposer must
demonstrate that the company has the financial capacity to fulfill the commitments of an
agreement with the Port. 
Marketing Plan and Implementation                             20 points 
The proposal will be evaluated based on the quality of the overall marketing plan for the
Airport's advertising inventory and promotional opportunities. 

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COMMISSION AGENDA  Action Item No. 6g                       Page 7 of 9 
Meeting Date: November 22, 2016 
Design, Implementation, Materials and Capital Investment                 15 points 
The proposal will be evaluated based on the quality of design that brings an overall cohesive
look to the program. 
Financial Projections and Rent Proposal                              20 points 
Financial projections and rent proposals will be evaluated based on the reasonableness of the
financial projections and the proposed percentage rent fee. 

Management, Staff, Operations and Environmental Sustainability            15 points 
The company must demonstrate its ability to effectively manage a comprehensive advertising
program, which also includes quality leadership and adequate levels of staffing. 
Small Business Participation                                       20 points 
The company must identify opportunities for the inclusion of small business participation 
including, but not limited to product sourcing; joint venturing /mentoring/subleasing/ 
subcontracting; and design/construction/maintenance.
Lease Parameters 
The lease term for this new agreement will be for a period of ten years commencing on August
1, 2017. 
For this new opportunity, the Port will establish the minimum annual guarantee of $3.4 million
for the first year of the agreement and a minimum percentage rent of 65%. These amounts
have been calculated based on the past performance of the program. The purpose of these
minimum amounts is to protect the Port's financial interest. For the second and subsequent
years, the tenant will be required to pay either 85% of the previous year's actual rent payment,
or percentage rent based on gross sales achieved during the year, whichever is greater. 
Interested businesses will propose both on the minimum annual guarantee and percentage
rent to the Port. These proposals shall be at or above the minimum amounts specified above.
Proposers may propose this either as a flat rent or tiered percentage rent. Each proposer must
provide the Port with a pro forma analysis that serves as the basis for the sales projections, rent
offer, costs to operate the business (including goods, labor, debt service, etc.) as well as the
anticipated profit margin.
A fixed security (based on the proposed MAG) will be required as part of the agreement. 


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COMMISSION AGENDA  Action Item No. 6g                       Page 8 of 9 
Meeting Date: November 22, 2016 
Solicitation Schedule 
Due to the complexity of the advertising agreements between advertising concessionaire
operators and their customers, six months is the desired time frame for a transition between
operators in order to allow for the transfer of existing advertising agreements, the
development of content, and the design and construction of new advertising features. The
schedule proposed below would allow for approximately four months of transition. 
November 2016           Request Commission approval for competitive solicitation 
December 2016  January 2017   Competitive solicitation 
February/March 2017        Award to preferred respondent 
February/March to July 2017     Preferred respondent transition (if necessary) 
August 1, 2017              New agreement in effect 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1  Do not release a solicitation and instead negotiate a new concession agreement
with the existing operator. 
Cost Implications: The Port would have a potential savings on administrative costs associated
with preparing, releasing, scoring, and negotiating an agreement from a solicitation. 
Pros: 
(1)   By negotiating a new concession agreement with the existing operator, that operator
will be able to secure longer term advertising deals with potential advertisers. 
(2)   Staff could negotiate the capital investment and improvements required for the
program. 
Cons: 
(1)   With a higher capital investment, and through the negotiations, a potential reduction
in revenue to the Port may occur. 
(2) The Port would not be able to see what the current operator's competitors may
propose in rent or innovations to the advertising program. 
This is not the recommended alternative. 
Alternative 2  Request Commission authorization for the proposed release of the advertising
solicitation. 
Cost Implications: The Port's administrative cost to prepare, release, score, and negotiate an
agreement from a solicitation. 
Pros: 
(1)   Provides an open competitive process for a concession opportunity that has not
occurred in ten (10) years. 
(2)   Allows the Port to see what innovations other adverting companies may have. 

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COMMISSION AGENDA  Action Item No. 6g                       Page 9 of 9 
Meeting Date: November 22, 2016 
Cons: 
(1)   With the potential for high capital investment for the requested improvements, rents
may be reduced from those in the current agreement. 
(2)   If the existing company is not selected as the preferred respondent, there would be a
transition period between the advertising companies, the Port, and existing
advertisers. 
This is the recommended alternative. 
FINANCIAL IMPLICATIONS 
Annual revenue to the Port will depend on the proposed terms and performance. The
minimum annual guaranteed revenue to the Port for the first year is $3.4 million. 
ATTACHMENTS TO THIS REQUEST 
(1)   Presentation slides PowerPoint 
(2)   Exhibit A  Advertising policy 
(3)   Exhibit B  Temporary Exhibit Guideline 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
September 27, 2016  The request for Commission authorization of a Competitive Solicitation
for the Airport Advertising and Promotion Concession was deferred. 









Template revised September 22, 2016; format updates October 19, 2016.