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Committee approves waiving competitive process for interim SFO employee café lease
Summary
The committee forwarded to the full Board a resolution waiving competitive procurement to allow Amora International to continue operating an interim employee café at SFO Terminal 1 during Terminal 1 renovations; airport staff described a $246,000 buildout cost and estimated tenant payments of about $183,003 over a 3-year base term.
The Budget & Finance Committee voted Sept. 21 to forward to the full Board a resolution waiving the competitive process to allow a lease agreement between Amora International and the City, by and through the Airport Commission, for an interim employee café at San Francisco International Airport’s Terminal 1.
Kathy Weidner of the airport’s staff said the waiver would allow the current operator to continue operating the employee cafeteria during the Terminal 1 renovation project. She described a pilot period for the employee cafeteria and explained that because of the Terminal 1 redevelopment’s sequencing and space uncertainty, airport staff delayed a competitive selection until stable space could be identified. She said the airport would build out the space in return for the current contractor providing restaurant equipment and staffing. Weidner acknowledged that the Budget Analyst Office identified a subsidy cost (construction) of at least $246,000 that “won’t be recaptured with the rent that we would receive from the tenant,” but airport staff characterized the cost as an investment to provide employees with an affordable dining option during construction.
The budget analyst’s report (as summarized in the hearing) shows estimated revenue from Amora to the airport of about $183,002.72 over the three-year base term; with two one-year options (a possible five-year total) projected revenue would total about $311,001.29. The report also noted minimum annual guarantee rent and tenant facility reimbursement fees combined would still be $54,008.71 less than the airport’s estimated $366,000 construction expenditure. Cheryl Nasheer (director of revenue development and management at the airport) described plans to create a permanent employee cafeteria in Terminal 2 within about three years via a full RFP and private tenant investment once a permanent location is finalized.
After no public comment, Supervisor Katie Tang moved to approve forwarding the waiver to the full Board with a positive recommendation; the motion passed without objection. The full Board will consider the waiver and any final lease action at a later date.
