FOR FOOD-BEVERAGE, RETAIL SERVICES AT LOS ANGELES INTERNATIONAL AIRPORT
New 17-Year Contract Covers Concessions in Terminals 1, 3 and 6
Los Angeles Board of Airport Commissioners approved a 17-year Terminal Commercial Manager Concession Agreement with Westfield Concession Management, LLC, (Westfield) to develop, lease and manage food and beverage, convenience retail, specialty retail and certain other passenger services in three terminals at Los Angeles International Airport (LAX). The agreement calls for a two-year development period and a 15-year operational period with forecasted minimum revenue to Los Angeles World Airports (LAWA) of over $17 million for the first fully developed year and over $180 million over the first 10 years of the term. Westfield and its concessionaires will be required to invest no less than $78.6 million in initial improvements and $15.7 million in mid-term refurbishment improvements to Terminals 1, 3 and 6. The agreement covers a minimum of 69,970 square feet of concession area.
“Los Angeles World Airports is undertaking a $4.11-billion modernization program at LAX to improve customer service, safety and security at one of the most significant international gateways in the world,” said LAWA Executive Director Gina Marie Lindsey. “A major focus of our customer service improvements is to create a cohesive, memorable and high-quality dining and shopping experience with a variety of new and innovative options that offer a ‘sense of place’ reflecting the Los Angeles region. Our selection of Westfield Concession Management will allow us to meet the demands of today’s travelers for quality dining, shopping and other services in a timely, cost-effective manner.”
“Westfield is very proud to be selected to partner with Los Angeles World Airports in the transformation of Los Angeles International Airport,” said Peter Lowy, Westfield Group chief executive officer. “We are fully committed to bringing our global resources and development expertise to deliver an iconic, world-class airport experience.”
As Terminal Commercial Manager for Terminals 1, 3 and 6, Westfield will select concessionaires subject to LAWA approval; design, develop and oversee construction of concession and related spaces; market and promote the concessionaires; negotiate and administer contracts with each concessionaire; and monitor and manage performance (including quality control over products and service levels, and financial performance). To enable clear separation between managing and operating, as well as to eliminate any conflicts of interest and, thereby, ensure consistent quality, customer service and performance monitoring, Westfield is not allowed to operate any of the concessions.
This is the second time LAWA has awarded a Terminal Commercial Manager Concession Agreement to Westfield Concession Management, LLC. In January, Westfield won a similar 17-year Terminal Commercial Manager Concession Agreement covering the existing Tom Bradley International Terminal (TBIT), the New TBIT, Terminal 2 and the iconic Theme Building at LAX. The forecasted minimum revenue to LAWA in that agreement is $331.1 million.
For today’s Board action, Westfield was selected from among three proposers following the release of a Request for Proposals in June 2011.
Proposals were evaluated by a panel of four LAWA executives and one outside member on criteria that included: concession development experience/capabilities; design and construction experience/capabilities; management team dedicated to LAX; conceptual plan for LAX terminal improvements; financial capacity and commitment; process for concessionaire selection and approval; managing initiatives defined under the Federal Aviation Administration’s Airport Concessions Disadvantaged Business Enterprise (ACDBE) Program; managing concessionaire performance and operations; and financial proposal.
Westfield currently has operations similar to LAWA’s Terminal Commercial Manager model at nine other U.S. airports, including New York/John F. Kennedy International, Boston/Logan International, Ronald Reagan/Washington National, Washington/Dulles International, and George Bush Intercontinental/Houston.
