Los Angeles World Airports

Transcription

1 World Airports TM RESOLUTION NO BE IT RESOLVED that the Board of Airport Commissioners approved a Third Amendment to Amended & Restated Terminal Facilities Lease and License Agreement LAA-3088 with United Airlines Inc. that will align the leased premises in Terminals 6, 7 and 8 at International Airport, as referenced in the Board-adopted staff report attached hereto and made part hereof; and LAX LA/Ontario Van Nuys City of Eric Garcetti Mayor BE IT FURTHER RESOLVED that the Board of Airport Commissioners authorized the Chief Executive Officer or designee to execute said Third Amendment upon approval as to form by City Attorney and upon approval by the City Council; and Board of Airport Commissioners Sean 0. Burton President 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 City CEQA Guidelines; and Valeria C. Velasco Vice President Jeffery J. Daar Gabriel L. Esliaghian Beatrice C. Hsu Nolan V. Rollins Dr. Cynthia A. Telles Deborah Hint Chief Executive Officer BE IT FURTHER RESOLVED that actions taken on this item by the Board of Airport Commissioners will become final pursuant to the provisions of City Charter Section O0 I hereby certify that this Resolution No is true and correct, as adopted by the Board of Airport Commissioners at its Regular Meeting held on Thursday, November 3, * Sandra J. Miller - Secretary BOARD OF AIRPORT COMMISSIONERS u i X ' I "5* 1 World Way California Mail RO. Box California Telephone Internet wv/w.lawa.aero

2 $ Los Angeles World Airports ltern(yfmber (re REPORT TO THE B Meeting Date: Approved by: tpfve Jones/ftirline Property and Concession Services 11/3/2016 ALA Reviewed by: Debbie L. Bowers, Deputy Executive Director Commercial Development Group CAP Review: Completed Pending N/A Reviewed for Date Approval Status By T9. Tty Atforne; Capital Budget 10/21/2016 HY N NA NE Operating Budget 10/21/2016 SYD N DNA RW CUM^/f\K CEQA 10/13/2016 BY N NM u\h^ eborah Flint - Chief Executive Officer Procurement 10/17/2016 ISY DN Cond MT Guest Experience 10/19/2016 HYDN BY SUBJECT: Approval of the Third Amendment to Airline Terminal Facilities Lease and License Agreement with United Airlines Inc. for Space in Terminals 6, 7 and 8 at International Airport Approve the Third Amendment to the Amended and Restated Terminals Facilities Lease and License Agreement with United Airlines Inc. for space in Terminals 6, 7, and 8 at International Airport. RECOMMENDAFTIONS: Management RECOMMENDS that the Board of Airport Commissioners: 1. ADOPT the Staff Report DETERMINE that this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Article III, Class 1 (18)(c) of the City CEQA Guidelines. APPROVE the proposed Third Amendment to the Amended and Restated Terminal Facilities Lease and License Agreement with United Airlines Inc., for space in Terminals 6, 7 and 8 at International Airport. Page 1

3 4. AUTHORIZE the Chief Executive Officer or her designee to execute the Third Amendment to the Amended and Restated Terminal Facilities Lease and License Agreement with United Airlines Inc., for space in Terminals 6, 7 and 8 at International Airport subject to approval as to form by City Attorney and upon approval by the City Council. DISCUSSION: 1. Purpose Align leased premises to facilitate airline relocations associated with the Delta Air Lines, Inc. (Delta) relocation at International Airport (LAX). 2. Prior Related Actions June 4, Board Order No. AO-3298 The Board of Airport Commissioners (Board) approved the Terminal Facilities Lease (LAA-3088) with United Airlines, Inc. (United) on June 4,1981 for passenger terminal space in Terminals 7 and 8. This Lease was amended by the First Amendment (Board Order No. AO-3368), the Second Amendment (Board Order No. AO-3404), the Third Amendment (Board Order No. AO-3445) and the Fourth Amendment (Board Order No. AO-3688). February 18, Board Resolution No The Board approved a Settlement Agreement with United that settled, among other things, certain matters related to United s occupancy of space in Terminals 7 and 8 and provided for United to lease certain space in Terminal 6. March 2, Board Order No. AO-5116 The Board approved an Airline Terminal Space Lease and License Agreement with United for Space in Terminal 6 and the First Amendment thereto as stipulated in the Settlement Agreement. October 28, Board Order No. AO-5159 The Board approved the Amended and Restated Terminals Facility Lease and License Agreement with United for space in Terminals 7 and 8 (Lease) as required by the Global Settlement Agreement approved by the Board on October 5, March 18, Board Resolution No The Board approved the Consent to the United/Continental merger that resulted in the vesting of lease agreements, including Continental s lease for space in Terminal 6. September 17, Board Resolution No The Board approved the First Amendment to the Lease. March 12, Board Resolution No The Board approved the Second Amendment to the Lease. Page 2

4 3. Current Action The proposed Third Amendment to the Lease (Amendment) will remove all premises in Terminal 6 that United currently leases and subleases to American Airlines, Inc. (American). American will continue to occupy the space it subleases pursuant to the LAX Passenger Terminal Tariff until a new lease is presented to the Board for review and approval. Removing the premises from United s Lease will allow World Airports (LAWA) to control future assignment or lease of these premises in support of the airline relocations currently being planned as part of the Delta relocation. All other provisions of the Lease remain unchanged. PROPOSED THIRD AMENDMENT SUMMARY CURRENT PROPOSED Commencement/Effective Date: November 15,1981 Same Expiration: Demised Premises* Estimated square footages: Terminal 6 area in lease: November 1, Variable due to construction - Starting area is approx. 424,000 square feet - 48,543 square feet Same - Variable due to construction - Ending area is approx. 383,000 square feet -0 square feet Approximate Annual Rent $64,000,000 $58,000,000 Preferential Use Gates *Note Regarding Demised Premises: Square feet will change during construction. 423,998 square feet reflects the estimated starting area of the demised premises prior to construction. 383,100 square feet reflects the estimated ending area after deducting the Terminal 6 space (approximately 48,543 square feet) proposed by the Amendment and after completion of construction. During construction, square feet of the demised premises range between approximately 423,998 square feet and 375,455 square feet, and will need to be adjusted accordingly for billing purposes. Action Requested Staff requests that the Board approve and authorize the Executive Director to execute the proposed Amendment, subject to approval as to form by the City Attorney and upon approval by the City Council. Fiscal Impact Approval of the proposed Amendment will reduce the revenue from the Lease with United by approximately $6,000,000 per year. However, the Terminal 6 premises are already occupied by another airline and enable LAWA to recoup the same amount through a separate direct agreement. Therefore, there is no net change in revenue. Page 3

5 4. Alternatives Considered Take No Action Do Not Execute the Third Amendment - If the Amendment is not approved, the premises in Terminal 6 will remain in United s Lease, which restricts LAWA s ability to provide appropriate space to airlines impacted by the Delta relocation. STANDARD PROVISIONS 1. 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 City CEQA Guidelines. 2. This item is subject to approval as to form by the City Attorney. 3. Actions taken on this item by the Board of Airport Commissioners will become final pursuant to the provisions of City Charter Section United Airlines will comply with the provisions of the Living Wage /Service Contract Worker Retention Ordinances. 5. This action is not subject to the Small Business Enterprise Program United Airlines has submitted an Affirmative Action Plan and will comply with the provisions of the Affirmative Action Program. United Airlines has been assigned Business Tax Registration Certificate No United Airlines has submitted the Certification of Compliance with Child Support Obligations and will comply with the Child Support Obligations Ordinance. United Airlines has approved insurance, in the terms and amounts required, on file with Los Angeles World Airports. 10. This item is not subject to the provisions of Charter Section 1022 (Use of Independent Contractors). 11. United Airlines has submitted the Contractor Responsibility Program Pledge of Compliance and will comply with the provisions of the Contractor Responsibility Program. 12. United Airlines has been determined by Public Works, Office of Contract Compliance, to be in full compliance with the provisions of the Equal Benefits Ordinance. 13. United Airlines will be required to comply with the provisions of the First Source Hiring Program for all non -trade LAX Airport jobs. 14. United Airlines has submitted the Bidders Contributions CEC Form 55 and comply with its provisions. Page 4