Supervisors pause contested SFO lease extensions after workers, analysts raise concerns

Supervisor Mark Farrell’s Budget & Finance Committee opened a contentious discussion Dec. 3 over a package of airport lease amendments that would suspend minimum annual guarantees and extend five Terminal 3 food‑service leases while the terminal is renovated.

Kathy Weidner of the San Francisco Airport explained that renovations forced closure of the tenants’ original locations and that the proposed amendments would redefine square footage, suspend minimum guarantees for closed locations and extend lease terms. Weidner asked the board to continue the item to allow additional tenant consultations.

Workers, union representatives and community groups urged supervisors to reject or delay the package. Molly Gomez, who said she has worked at SFO for about 35 years, asked the committee not to ‘‘reward’’ tenants that have refused fair contracts while employees lack job security. A Local 2 representative said bargaining with the food‑service employers had stalled and that recent company proposals included concessions the union called ‘‘takeaways.’’ Jobs with Justice and Coleman Advocates urged the board to require competitive bidding or worker protections when considering lease extensions.

Supervisor David Campos said the presentation raised serious questions about competitive procurement and said he was prepared to reject the item. The board’s budget analyst noted that the original leases had been competitively awarded and recommended technical amendments to the proposed resolution to correct reimbursement calculations and contingency language.

After public comment and discussion, Campos moved to continue the item to the committee meeting on Jan. 7 to allow airport staff to respond to recently raised concerns; the motion was seconded and taken without objection. In a separate matter, the committee approved an amendment to the airport’s Transcor contract for a ground transportation and taxi management system, accepting budget‑analyst recommendations to adjust authorized contingency levels and documentation of added scope.

What changed and what’s next: The Jan. 7 continuation will give the airport time to explain the basis for the proposed 10‑year extensions, the financial calculations for reimbursements and alternatives to granting long lease terms while a labor dispute is unresolved. The Transcor contract amendment moved forward after the committee accepted the analyst’s recommended adjustments.

Quotes: "I urge you not to reward them," said Molly Gomez, an SFO worker, urging supervisors not to approve the lease extensions while employees lack a contract.

"There are rules in place for a reason," Supervisor David Campos said, urging scrutiny of procurement practices.

Details: The Transcor amendment would add approximately $2.6 million to the airport ground‑transportation contract to expand scope (including additional AVI readers, CCTV and an integrated revenue management system) and to replace aging automated vehicle identification systems; the airport said the system serves about 10,000 permitted ground‑transportation vehicles and supports roughly $13.5 million in annual revenue. The budget analyst recommended reducing the requested contingency to align with policy; the airport agreed to the analyst’s changes.

The lease amendment package included reimbursement of unamortized construction costs (identified in the analyst’s report) and an estimated first‑year minimum annual guarantee revenue total of approximately $658,004 from the five tenants under the proposed 10‑year terms. The analyst estimated a reduced revenue impact from suspending guarantees at about $1,037,090, which the airport’s airlines would cover under existing break‑even policy.

The committee adjourned after agreeing to revisit item 7 on Jan. 7.