SIXTH AMENDMENT TO RETAIL CONCESSION AGREEMENT BETWEEN THE CITY OF SAN JOSE AND AMS-SJC JV

Transcription

1 SIXTH AMENDMENT TO RETAIL CONCESSION AGREEMENT BETWEEN THE CITY OF SAN JOSE AND AMS-SJC JV This SIXTH AMENDMENT TO RETAIL CONCESSION AGREEMENT is entered into as of 2017, by the CITY OF SAN JOSE ( City ), a municipal corporation of the State of California, and AMS-SJC JV, a Joint Venture authorized to do business in the State of California ( Concessionaire ). RECITALS WHEREAS, on February 2, 2009, City and Concessionaire entered into an agreement entitled NORMAN Y. MINETA SAN JOSE INTERNATIONAL AIRPORT RETAIL CONCESSION AGREEMENT BY AND BETWEEN THE CITY OF SAN JOSE AND AMS-SJC JV (referred to herein as the Agreement ); and WHEREAS, on November 15, 2011, City and Concessionaire entered into a First Amendment to the Agreement to revise provisions regarding customer pricing, amend the Concession Area and concepts, memorialize changes to the Minimum Annual Guarantee commencement date and annual adjustment date, and make clerical corrections; and WHEREAS, on December 7, 2011, City and Concessionaire consented to the assignment of the Marilla Chocolate Company to the remaining joint venturers, Airport Management Services, LLC (dba Hudson Group), and J.R. Lester & Associates, Ltd.; and WHEREAS, on May 07, 2012, City and Concessionaire entered into a Second Amendment to the Agreement to delete the terms and conditions of the City s Living Wage Policy and/or Prevailing Wage Policy for the remaining term of the amended AMS-SJC JV Retail Concession Agreement 1

2 Agreement hereby making Concessionaire subject to the Minimum Compensation requirements of Chapter of the San José Municipal Code Airport Living Wage and Labor Standards ; and WHEREAS, on December 10, 2014, City and Concessionaire entered into a Third Amendment to the Agreement to revise Section 22.6 Minimum Mid-Term Concession Refurbishment Expenditure to grant the Director authority to change the required dates for the mid-term refurbishments; and WHEREAS, on January 27, 2015, City and Concessionaire entered into a Fourth Amendment to the Agreement to permit the sale of Duty Free Goods under the Concession Operations, further revise Exhibit B, and extend the term of the Agreement through June 30, 2024; and WHEREAS, on June 18, 2015, City and Concessionaire entered into a Fifth Amendment to the Agreement to relocate the Concession Support Space and further revise Exhibit B, and to add nondiscrimination requirements, as mandated by the Federal Aviation Administration; WHEREAS, Dufry AG is the parent company of both Concessionaire and of WDFG North America LLC ( WDFG ), which also operates Concession Operations at the Airport as a concessionaire pursuant to a separate Retail Concession Agreement, dated February 2, 2009, as amended ( WDFG Agreement ) with the City; and WHEREAS, Dufry AG and City desire to consolidate and incorporate the WDFG Agreement under the Agreement; and WHEREAS, City and Concessionaire desire to further amend the amended Agreement to extend the term; revise the Concession Operations; add to the Modification of Concession Area provisions; add to the Director s Authority provisions; add 1,500 square feet of Concession Support Space; add to the Jobs Creation and Reporting AMS-SJC JV Retail Concession Agreement 2

3 Requirement provisions; modify the Annual MAG Adjustment, and add provisions as required under federal law and regulations; NOW, THEREFORE, the parties agree to further amend the amended Agreement as follows: SECTION 1. SECTION 1 SUMMARY OF TERMS AND DEFINITIONS is hereby amended to revise the following definitions: Expiration Date (SECTION 2.1) shall mean June 30, 2026, subject to earlier termination as provided in this Agreement. Minimum Annual Guarantee (MAG) shall collectively refer to Hudson Concession Location MAG Payment and the WDFG Concession Location MAG Payment. Percentage Fee shall collectively refer to the Hudson Concession Location Percentage Fee and the WDFG Concession Location Percentage Fee. SECTION 2. SECTION 1 SUMMARY OF TERMS AND DEFINITIONS is hereby amended to revise the following definitions: Hudson Concession Location MAG Payment means the Minimum Annual Guarantee payable by Concessionaire under the terms of this Agreement, but expressly excluding the MAG payable under the terms of the WDFG Agreement. Hudson Concession Location Percentage Fee means the Percentage Fee payable by Concessionaire under the terms of this Agreement, but expressly excluding the Percentage Fee payable under the terms of the WDFG Agreement. AMS-SJC JV Retail Concession Agreement 3

4 WDFG Concession Location MAG Payment means the Minimum Annual Guarantee payable by Concessionaire under the terms of the WDFG Agreement only; provided, however, in no event shall such payment be less than One Million Three Hundred Twenty-Eight Thousand One Hundred Eighty-One and 52/100 Dollars ($1,328,181.52). WDFG Concession Location Percentage Fee means the Percentage Fee payable by Concessionaire under the terms of the WDFG Agreement only. SECTION 3. SECTION 2 TERM OF AGREEMENT subsection 2.1 entitled Term is hereby amended to read as follows: 2.1 Term This Agreement shall be binding on both parties from the Effective Date set forth in Summary. The term of this Agreement shall continue until the Expiration Date, unless sooner terminated in accordance with the terms of this Agreement. SECTION 4. SECTION 3 AUTHORIZED ACTIVITIES subsection 3.1 entitled Concession Operations, is hereby amended to read as follows: 3.1 Concession Operations Concessionaire shall have the non-exclusive right, privilege, and obligation to finance, design, develop, construct, install, maintain and operate Retail Concession Operations, for the purpose of establishing a high quality concession operation as approved by the City. This Agreement is non-exclusive in character and in no way prevents the City from entering into an agreement with any other parties for the sale or offering of competitive services, products or items by other concessionaires and/or concessionaires or others in other premises at the Airport during the Term of this Agreement. Concessionaire shall use the Concession Area for the Concession Operations and for no other purpose. In addition to the foregoing, the WDFG Agreement shall be incorporated and consolidated into this Agreement as EXHIBIT S AMS-SJC JV Retail Concession Agreement 4

5 so that the Concession Locations set forth in the WDFG Agreement become part of the Concession Area under this Agreement. Except for the Term, which is provided in this Agreement, or as otherwise expressly provided in this Agreement, the Concession Locations comprising the Concession Area set forth in the WDFG Agreement (EXHIBIT S) shall continue to be subject to all the terms and conditions of the WDFG Agreement (EXHIBIT S); provided, however, the parties acknowledge and agreement that (i) from and after the date of the Sixth Amendment to this Agreement, the Concessionaire under the WDFG Agreement shall be AMS-SJC JV, and (ii) the terms of the Fifth Amendment to the WDFG Agreement shall not be incorporated into this Agreement (the WDFG as incorporated into this Agreement is referred to herein as the WDFG Agreement ). SECTION 5. SECTION 4 RESTRICTIONS ON ACTIVITIES subsection 4.7.1, entitled Modification of Concession Area, is hereby amended to add subsections and as follows: Notwithstanding any other provision of this Agreement to the contrary and pursuant to the provisions of the WDFG Agreement regarding return of Concession Areas at the end of the Term (Section 15, Maintenance and Repairs), Concessionaire shall surrender possession of all Concession Locations comprising the Concession Area of the WDFG Agreement (EXHIBIT S) to City on June 30, City and Concessionaire may mutually agree to amend this Agreement to revise the Concession Areas set forth under this Agreement and the WDFG Agreement (EXHIBIT S). SECTION 6. SECTION 4 RESTRICTIONS ON ACTIVITIES subsection 4.7.3, entitled Director s Authority, is hereby amended to add subsection as follows: Amendments to this Agreement that revise the Concession Areas set forth under this Agreement and the WDFG Agreement (EXHIBIT S) and/or that AMS-SJC JV Retail Concession Agreement 5

6 correspondingly modify the amount of the MAG Payment as a result of revisions to a Concession Area may be executed on behalf of the City by the Director. SECTION 7. SECTION 4 RESTRICTIONS ON ACTIVITIES subsection , entitled Concession Support Space, is hereby amended to add subsection as follows: Notwithstanding subsection above, in consideration for the terms of this Sixth Amendment, City shall provide Concessionaire with approximately one thousand five hundred (1,500) square feet of Concession Support Space to support its Concession Operations at no additional rent. SECTION 8. SECTION 4 RESTRICTIONS ON ACTIVITIES, subsection 4.21, entitled Personnel, is hereby amended to add subsection as follows: Labor Peace Assurance and Employee Work Environment. Pursuant to San José Municipal Code Chapter 25.11, Concessionaire s Labor Peace Assurances and Employee Work Environment Report is attached hereto as EXHIBIT R. Concessionaire shall require each of its Subconcessionaires to provide it with assurances as to how the Subconcessionaire will prevent service disruptions at the Airport due to labor disputes. SECTION 9. SECTION 6 FEES & DEPOSITS subsection entitled Concession Fee Calculation, is hereby amended to add subsection c to read as follows: c Concessionaire and City acknowledge and agree that WDFG paid its January 2017 monthly MAG Payment pursuant to Section 6 of the WDFG Agreement. With respect to solely the Concession Locations comprising the Concession Area under the WDFG Agreement (EXHIBIT S), and subject to the terms and conditions of the WDFG Agreement (EXHIBIT S), not later than February 20, 2017, Concessionaire will (i) deliver to City as WDFG s final rent a sum of money which represents the amount by which the prorated Percentage Fee for the period from AMS-SJC JV Retail Concession Agreement 6

7 January 1, 2017 through the date of full execution of this Sixth Amendment that exceeds the MAG paid by WDFG for WDFG s January 2017 MAG Payment; and (ii) a final Monthly Concession Report for WDFG s January 2017 activity, even if no money is due. In the event that the MAG Payment paid by WDFG for January 2017 exceeds the prorated Percentage Fee for January 2017, City will refund to Concessionaire the prorated MAG Payment for the remainder of January 2017 after the date of full execution of this Sixth Amendment no later than thirty (30) days after City s receipt of Concessionaire s final WDFG Monthly Concession Report. SECTION 10. SECTION 6 FEES & DEPOSITS subsection entitled Annual MAG Adjustment, is hereby amended to revise subsection to read as follows: The Annual Adjustment Date for each MAG shall occur July 1 of each year. On each Annual Adjustment Date, each MAG shall be adjusted to equal eighty-five percent (85%) of the Concession Fee actually due to the City during the previous twelve (12) months with respect to this Agreement and the WDFG Agreement. However, the MAG for any year shall not be less than the first year s MAG and the WDFG Concession Location MAG Payment shall not be less than One Million Three Hundred Twenty-Eight Thousand One Hundred Eighty-One and 52/100 Dollars ($1,328,181.52). An Annual Adjustment shall be made at the end of each and every Annual Adjustment Date with respect to any underpayment or overpayment of the Concession Fee. If Concessionaire has overpaid the Concession Fee, City shall apply the overpayment to any monthly installment then due and payable to City. SECTION 11. SECTION 31 TITLE VI LIST OF PERTINENT NONDISCRIMINATION AUTHORITIES is hereby added as follows: (Source: Appendix E of Appendix 4 of FAA Order , Nondiscrimination in Federally-Assisted Programs at the Federal Aviation Administration) AMS-SJC JV Retail Concession Agreement 7

8 During the performance of the Agreement, the Concessionaire, for itself, its assignees, and successors in interest (hereinafter referred to in this SECTION 32 as the Concessionaire ) agrees to comply with the following non-discrimination statutes and authorities; including but not limited to: Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq., 78 stat. 252), (prohibits discrimination on the basis of race, color, national origin); 49 CFR part 21 (Non-discrimination In Federally-Assisted Programs of The Department of Transportation Effectuation of Title VI of The Civil Rights Act of 1964); The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 U.S.C. 4601), (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal-aid programs and projects); Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. 794 et seq.), as amended, (prohibits discrimination on the basis of disability); and 49 CFR part 27; The Age Discrimination Act of 1975, as amended, (42 U.S.C et seq.), (prohibits discrimination on the basis of age); Airport and Airway Improvement Act of 1982, (49 USC 471, Section 47123), as amended, (prohibits discrimination based on race, creed, color, national origin, or sex); The Civil Rights Restoration Act of 1987, (PL ), (Broadened the scope, coverage and applicability of Title VI of the Civil Rights Act of 1964, The Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by AMS-SJC JV Retail Concession Agreement 8

9 expanding the definition of the terms programs or activities to include all of the programs or activities of the Federal-aid recipients, sub-recipients and contractors, whether such programs or activities are Federally funded or not); Titles II and III of the Americans with Disabilities Act of 1990, which prohibit discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing entities (42 U.S.C ) as implemented by Department of Transportation regulations at 49 CFR parts 37 and 38; The Federal Aviation Administration s Non-discrimination statute (49 U.S.C ) (prohibits discrimination on the basis of race, color, national origin, and sex); Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, which ensures nondiscrimination against minority populations by discouraging programs, policies, and activities with disproportionately high and adverse human health or environmental effects on minority and low-income populations; Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency, and resulting agency guidance, national origin discrimination includes discrimination because of limited English proficiency (LEP). To ensure compliance with Title VI, you must take reasonable steps to ensure that LEP persons have meaningful access to your programs (70 Fed. Reg. at to 74100); Title IX of the Education Amendments of 1972, as amended, which prohibits you from discriminating because of sex in education programs or activities (20 U.S.C et seq). AMS-SJC JV Retail Concession Agreement 9

10 SECTION 12. SECTION 32 OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970 is hereby added as follows: This Agreement incorporates by reference the requirements of 29 CFR Part 1910 with the same force and effect as if given in full text. Concessionaire must provide a work environment that is free from recognized hazards that may cause death or serious physical harm to the employee. The Concessionaire retains full responsibility to monitor its compliance and their subcontractor s compliance with the applicable requirements of the Occupational Safety and Health Act of 1970 (20 CFR Part 1910). Concessionaire must address any claims or disputes that pertain to a referenced requirement directly with the U.S. Department of Labor Occupational Safety and Health Administration. SECTION 13. SECTION 33 FEDERAL FAIR LABOR STANDARDS ACT (FEDERAL MINIMUM WAGE) is hereby added as follows: This Agreement incorporates by reference the provisions of 29 CFR part 201, the Federal Fair Labor Standards Act (FLSA), with the same force and effect as if given in full text. The FLSA sets minimum wage, overtime pay, recordkeeping, and child labor standards for full and part time workers. The Concessionaire has full responsibility to monitor compliance to the referenced statute or regulation. The Concessionaire must address any claims or disputes that arise from this requirement directly with the U.S. Department of Labor Wage and Hour Division. SECTION 14. SECTION 34 GENERAL CIVIL RIGHTS PROVISIONS is hereby added as follows: AMS-SJC JV Retail Concession Agreement 10

11 The contractor agrees to comply with pertinent statutes, Executive Orders and such rules as are promulgated to ensure that no person shall, on the grounds of race, creed, color, national origin, sex, age, or disability be excluded from participating in any activity conducted with or benefiting from Federal assistance. This provision binds the contractor and subtier contractors from the bid solicitation period through the completion of the contract. This provision is in addition to that required of Title VI of the Civil Rights Act of SECTION 15. EXHIBIT R CONCESSIONAIRE S LABOR PEACE ASSURANCES AND EMPLOYEE WORK ENVIRONMENT REPORT is hereby attached and incorporated into this Sixth Amendment. SECTION 16. EXHIBIT S WDFG AGREEMENT is hereby attached, added and incorporated into this Sixth Amendment. SECTION 17. All of the terms and conditions of the amended Agreement not specifically modified by this Sixth Amendment shall remain in full force and effect. AMS-SJC JV Retail Concession Agreement 11

12 WITNESS THE EXECUTION HEREOF on the day and year first written above. CITY APPROVED AS TO FORM: CITY OF SAN JOSE, a municipal corporation of the State of California KEVIN FISHER Chief Deputy City Attorney TONI J. TABER, CMC City Clerk Date: CONCESSIONAIRE AMS-SJC JV, a Joint Venture AIRPORT MANAGEMENT SERVICES, LLC, a Delaware limited liability company authorized to do business in the State of California (dba Hudson Group) By: Name: Title: Date: J.R. LESTER & ASSOCIATES, LTD, a California corporation By: Name: Title: Date: AMS-SJC JV Retail Concession Agreement 12

13 CORPORATE SECRETARY CERTIFICATE of the corporation. This certificate shall be executed by the secretary or assistant secretary I, certify that I Name of Secretary or Assistant Secretary am the Secretary or Assistant Secretary of the corporation named in the attached agreement; that Name of Person that Signed Agreement signed the agreement on behalf of the corporation as the Title of Person that Signed the Agreement of the corporation; and that the agreement was duly signed for and on behalf of the corporation by authority of its Board of Directors, and is within the scope of its corporate powers. Signature of Secretary or Assistant Secretary Corporate Seal Date

14 CERTIFICATE OF LLC AUTHORITY This Certificate of LLC Authority shall be executed by the manager of the limited liability company. I,, certify that I am the manager of the Name of Manager limited liability company named in the attached agreement; that Name of Person that Signed Agreement signed the agreement on behalf of the limited liability company as the Title of Person that Signed Agreement of the limited liability company; and that the agreement was duly signed for and on behalf of the limited liability company by authority of its members, and is within the scope of its limited liability company powers. By: Name: Its: Manager Date:

15 EXHIBIT R CONCESSIONAIRE S LABOR PEACE ASSURANCES AND EMPLOYEE WORK ENVIRONMENT (to be attached)

16 EXHIBIT S WDFG AGREEMENT (to be attached)