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Committee delays vote on American Express Centurion Lounge expansion at SFO for further review
Summary
Supervisors expressed concern that the negotiated rental rate for an AmEx Centurion Lounge expansion at SFO was substantially below comparable category 2 rates and asked the airport to revisit terms; the committee voted to continue the item to the call of the chair to allow the airport and City Attorney to consult further.
The committee continued without a vote on the substantive amendment to an existing lease that would expand the American Express Centurion Lounge in Terminal 3 to approximately 15,287 square feet, set a new minimum annual guarantee near $3.2 million and extend the term by seven years.
Kathy Weidner of San Francisco International Airport said the airport negotiated a lower rental rate for the new space accounting for its location and anticipated tenant investment. The Budget and Legislative Analyst recommended the committee amend the resolution to note that the airport estimates tenant improvements for the new space will be at least $1,200 per square foot; that figure and the rent differential prompted questions from Supervisors Asha Safaei and Gordon Mar. Safaei said the discount from category 2 rates was “concerning” and urged the airport to explore stronger economic terms or a shorter term; an American Express representative told the committee the deal had already been executed and renegotiation could jeopardize the project.
Deputy City Attorney Brad Russi advised the committee to continue the item to allow the airport to consult with counsel on whether renegotiation is feasible. The committee voted to continue Item 4 to the call of the chair (3–0). The airport said it will consult with revenue staff and the City Attorney and return with background and options.
