Los Angeles World Airports

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RESOLUTION NO. 25936

BE IT RESOLVED that the Board of Airport Commissioners approved the Second Amendment to Terminal Commercial Management Concession Agreement LAA-8613 with Westfield Airports, LLC to extend the term two (2)-years and six (6)-months for premises in Terminal 2 at Los Angeles International Airport, as referenced in the Board-adopted staff report attached hereto and made part hereof; and

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City of Los Angelos

Eric Garcetti Mayor BE IT FURTHER RESOLVED that the Board of Airport Commissioners authorized the Chief

Executive Officer to execute said Second Amendment upon approval as to form by the City Attorney and approval of the Los Angeles City Council; and

Board of Airport Commissioners

Sean 0. Burton President BE IT FURTHER RESOLVED that the Board of Airport Commissioners found that the work

specified on the contract can be performed more feasibly or economically by an independent contractor than by City employees where City employees are not able to maintain or operate the Custom Architectural Features in the normal course of business, as itemized in writing by the Deputy Executive Director (or his/her designee) of the department responsible for such maintenance and operation, and as determined by the same to be an exception to the competitive bidding process under Charter Code Section 371(e)(10); and

Valeria C. Velasco Vice President

Jeffery J. Daar Gabriel L Eshaghian Beatrice C. Hsu Nolan V. Rollins Dr. Cynthia A. Telles

Deborah Hint Chief Executive Officer BE IT FURTHER RESOLVED that the issuance of permits, leases, agreements, gate and

space assignments, and renewals, amendments or extensions thereof, or other entitlements granting use of existing airport facilities or its operations is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Article III Class 1(18)(c) of the Los Angeles City CEQA Guidelines; and

BE IT FURTHER RESOLVED that actions taken on this item by the Board of Airport Commissioners will become final pursuant to the provisions of the Los Angeles City Charter Section 606.

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I hereby certify that this Resolution No. 25936 is true and correct, as adopted by the Board of Airport Commissioners at its Regular Meeting held on Thursday, April 21, 2016.

Sandra J. Miller - SecretaryBOARD OF AIRPORT COMMISSIONERS

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1 World Way Los Angeles California 90045-5803 Mail RO. Box 92216 Los Angeles California 90009-2216 Telephone 310 646 5252 Internet www.lawa.aero

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Approvedtjy^Dave Jon^s, Director, Terrjviqans Business Management 4/21/2016

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Reviewed by: Debbie Bowers, Deputy Executive Director CAP Review:

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SUBJECT: Amendment to Terminal Commercial Management Concession Agreement with Westfield Airports, LLC at Los Angeles International Airport

Approve the Second Amendment to Terminal Commercial Management Concession Agreement LAA-8613 with Westfield Airports, LLC at Los Angeles International Airport to extend the term of the Agreement for premises in Terminal 2 by two-years and six-months.

RECOMMENDATIONS:

Management RECOMMENDS that the Board of Airport Commissioners:

1. ADOPT the Staff Report.

2. DETERMINE that this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Article III, Class 1 (18)(c) of the Los Angeles City CEQA Guidelines.

3. APPROVE the Second Amendment to Terminal Commercial Management Concession Agreement LAA-8613 with Westfield Airports, LLC.

4. FIND that the work specified on the proposed contract can be performed more feasibly or economically by an independent contractor than by City employees where City employees are not able to maintain or operate the Custom Architectural Features in the normal course

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of business, as itemized in writing by the Deputy Executive Director (or his/her designee) of the department responsible for such maintenance and operation, and as determined by the same to be an exception to the competitive bidding process under Charter Code Section 371(e)(10).

5. AUTHORIZE the Chief Executive Officer to execute the Second Amendment to Terminal Commercial Management Concession Agreement LAA-8613 with Westfield Airports, LLC upon approval as to form by the City Attorney and approval of the Los Angeles City Council.

DISCUSSION:

1. Purpose

Align the Expiration Date for Terminal 2 premises under the Terminal Commercial Manager Agreement with Westfield Airports, LLC, (Westfield) with the Tom Bradley International Terminal (TBIT) premises in the same agreement.

2. Prior Related Actions

• January 23, 2012 - Board Resolution 24670The Board of Airport Commissioners (Board) approved award of a Terminal Commercial Manager (TCM) Concession Agreement to Westfield having a term of 17-years, comprised of a two-year development period and a 15-year operating period, and requiring Westfield to develop, lease, and manage convenience retail, specialty retail, food and beverage, and certain passenger services in TBIT and Terminal 2 and establishing an option to redevelop the Theme Building that has since expired (TCM Agreement LAA-8613).

• January 15, 2015 - Board Resolution 25616The Board approved the First Amendment to LAA-8613 to extend the term for premises in TBIT by three years and at Terminal 2 for six-months. On November 19, 2015, Los Angeles World Airports (LAWA) had consented to TCM’s name change from Westfield Concession Management, LLC to Westfield Airports, LLC.

3. Current Action

Through term extensions, the First Amendment to LAA-8613 addressed (i) cost and schedule impacts related to the delayed opening of Bradley West and (ii) administrative delays in initiating redevelopment of Terminal 2. The negotiated three-year extension of the term was concluded on the assumption that all premises under TCM Agreement LAA-8613 would have the same expiration date.

However, at the time of the First Amendment staff recommended that approval of the extension as it relates to the Terminal 2 premises be temporarily withheld and conditioned on Westfield’s successful performance of critical construction and delivery of the Terminal 2 program component. In particular, LAWA required that Westfield meet operational deadlines in Terminal 2 in preparation for the 2015 Special Olympics hosted by Los Angeles. Since the approval of the First Amendment, Westfield substantially and successfully completed the critical Terminal 2 concession program elements as required,

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and did so within a compressed timeline while incurring an additional capital investment of over $12.8 million.

As a result of the fulfilled performance, LAWA is now recommending approval of the extension to term for premises in Terminal 2, thereby making the Terminal 2 premises co­terminus with the expiration date for TBIT. In addition, this extension will result in LAWA receiving additional guaranteed rent of at least $8.5 million during the term.

Action Requested

Staff requests the Board approve the Second Amendment to TCM Agreement LAA-8613 and authorize the Executive Director to execute the Second Amendment after approval as to form by the City Attorney and upon approval of the Los Angeles City Council.

Fiscal Impact

Approving this amendment will result in no additional cost to LAWA and will generate a minimum of $8.5 million in additional revenue to LAWA over the extension term.

4. Alternatives Considered

• Take No Action

Not amending TCM Agreement LAA-8613 to add term to Terminal 2 will fail to recognize Westfield’s the successful completion of the Terminal 2 program component as originally proposed and may result in Westfield seeking to revisit the previously negotiated TBIT term extension.

APPROPRIATIONS:

No appropriations are requested for this item..

STANDARD PROVISIONS:

The issuance of permits, leases, agreements, gate and space assignments, and renewals, amendments or extensions thereof, or other entitlements granting use of existing airport facilities or its operations is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Article III, Class 1 (18) (c) of the Los Angeles City CEQA Guidelines.

1.

This Agreement will be approved as to form by the City Attorney.2.

Actions taken on this item by the Board of Airport Commissioners will become final pursuant to the provisions of the Los Angeles City Charter Section 606.

3.

Westfield is required by contract to comply with the provisions of the Living Wage Ordinance.

4.

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5. Procurement Services Division has reviewed this action (File #5124) and established the following ACDBE goals: Food/Beverage - 25%; Retail - 20%. Westfield proposed 25% ACDBE participation for Food/Beverage and 20% ACDBE participation for Retail. Westfield has achieved 53.39% participation for Food/Beverage and 54.94% participation for Retail to date.

6. Westfield is required by contract to comply with the provisions of the Affirmative Action Program.

7. Westfield has been assigned Business Tax Registration Certificate number 0002573628-0001-4.

8. Westfield is required by contract to comply with the provisions of the Child Support Obligations Ordinance.

9. Westfield has approved insurance documents, in the terms and amounts required, on file with the Los Angeles World Airports.

10. Pursuant to Charter Section 1022, staff determined that the work specified on the proposed contract can be performed more feasibly or economically by an independent contractor than by City employees.

11. Westfield has submitted the Contractor Responsibility Program Pledge of Compliance and will comply with the provisions of the Contractor Responsibility Program.

12. Westfield has been determined by Public Works, Office of Contract Compliance to be in compliance with the provisions of the Equal Benefits Ordinance.

13. Westfield will be required to comply with the provisions of the First Source Hiring Program for all non-trade Airport jobs.

14. Westfield has submitted the Bidder Contributions CEC Form 55 and will comply with its provisions.

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