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Committee moves a package of SFO retail and wellness leases to the Board

San Francisco Board of Supervisors Budget and Finance Committee · January 30, 2019

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Summary

The Budget & Finance Committee forwarded multiple airport concession leases — Terminal 1 convenience and retail outlets, InMotion electronic stores across terminals, and spa/wellness concessions — with Budget Analyst endorsement; airport staff said concessionaires are expected to pay percentage rent rather than the minimum guarantees.

The Budget & Finance Committee forwarded a package of San Francisco International Airport concession leases to the full Board after presentations by airport staff and a Budget Legislative Analyst review.

Kathy Weidner of SFO described two Term 1 leases (Marshall Retail Group and Paradis Lagardere) with minimum annual guarantees of $440,000 and $700,000 respectively, and additional leases with InMotion Entertainment Group and a wellness concession (SPA BR SFO) in other terminal areas. Weidner said Terminal 1 is opening in phases and that the airport expects concessions will pay on the higher percentage-rent formula rather than the minimum guarantees once sales volumes mature.

The BLA reviewed the competitive process, said proposers were reviewed and scored, and recommended approval of the package. Supervisors moved to forward the items with a positive recommendation and the committee took the motion without objection. The leases will go before the full Board for final action.