vccy Los Angeles World Airports RESOLUTION NO

Transcription

1 Los Angeles World Airports FM RESOLUTION NO LAX LA/Ontario Van Nuy* City of Los Angeles Eric Garcetti Mayor Board of Airport Commissioners Sean 0. Burton President Valeria C. Veiasco Vice President Jeffery J. Daar Gabriel L. Eshaghian Beatrice C. Hsu Nolan V. Rollins Dr, Cynthia A. Telles Deborah Flint Executive Director BE IT RESOLVED that the Board of Airport Commissioners approved a First Amendment to Lease LAA-8555 with Flying Food Group Pacific, Inc. to extend the term by two (2)-years and approve building rental rate for facility located at 6751 West Imperial Highway at Los Angeles International Airport, as referenced in the Board-adopted staff report attached hereto and made part hereof; and BE IT FURTHER RESOLVED that the Board of Airport Commissioners authorized the Executive Director to execute said First Amendment upon approval as to form by the City Attorney and upon approval by the Los Angeles City Council; and 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 involving negligible or no expansion of use and/or alteration or modification of the facilities or its operations beyond that previously existing or permitted 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 Los Angeles 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 Special Meeting held on Thursday, January 14, Sandra J. Miller - Secretary BOARD OF AIRPORT COMMISSIONERS X' lujilwacw l vccy 1 World Way Los Angeles California Mail RO. Box Los Angeles California Telephone Internet

2 WM Los Angeles World Airports Itei imler REPORT TO THE! BOARD/ OF AIRPORT COMMISSIONERS Meeting Date: Approved amon Olivares, irecfor Leasii levelopment 1/14/2016 Completed Reviewed by: Debbie Bowers, Deputyj/Executive Director CAO Review: Pending N/A Reviewed for Date Approval Status By CityAttorfoey Capital Budget 12/15/15 V N NA Operating Budget 12/15/15 BYD N DNA RW CEQA 10/16/15 BY N MV a eborah Flint - Executive Director Procurement 12/14/15 DN LI Cond MT DS Guest Experience 10/19/2015 BY ON BY SUBJECT: First Amendment to Lease with Flying Food Group Pacific, Inc. at Los Angeles International Airport Approve the First Amendment to the Lease Agreement LAA-8555 with Flying Food Group Pacific, Inc. to extend the term by two-years and approve the building rental rate for the facility located at 6751 West Imperial Highway at Los Angeles International Airport that will generate approximately $993,500 in revenue in the first year and approximately $2,001,000 over the twoyear extension. RECOMMENDA TIONS: 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 Los Angeles City CEQA Guidelines. APPROVE the First Amendment, and associated building rental rate, with Flying Food Group Pacific, Inc. AUTHORIZE the Executive Director to execute the First Amendment between the City of Los Angeles and Flying Food Group Pacific, Inc. upon approval as to form by the City Attorney and approval by the Los Angeles City Council. Page 1

3 DISCUSSION: 1. Purpose Allow Flying Food Group Pacific, Inc. (Flying Food) to continue its in-flight catering operations at Los Angeles International Airport (LAX), serving mostly international flights. 2. Prior Related Actions August 21,1985 Board Order No. AO-3836 (Lease No. LAA-4982) The Board of Airport Commissioners (Board) approved a 25-year Lease with Nikko Inflight Catering Co. LTD (Nikko), for a 134,234 square foot (SF) parcel of land located at 6751 West Imperial Highway at LAX., September 2, 2003 Board Order No. AO-4884 (Lease No. LAA-8181) The Board approved a five-year Lease with Nikko, for property located at 6751 W. Imperial Highway at LAX. (Lease No. LAA-4982 was subject to an early termination concurrent with the early repayment of Regional Airports Improvement Corporation (RAIC) bond financing; the RAIC bond financing was paid off on October 31, 2003.) August 29, 2006 Consent to Name Change (Lease No. LAA-8181) The Executive Director approved a consent to name change from Nikko to Flying Food. December 6, 2010 Board Order No. AO-5290 (Lease No. LAA-8555) The Board approved a five-year Lease with Flying Food for property located at 6751 West Imperial Highway at LAX. 3. Current Action Flying Food is a major catering company serving airlines at U.S. airports, and currently serves approximately 14 international airlines at LAX. Flying Food currently has a five-year land and building Lease at LAX, which will expire on January 30, There currently are three major catering companies operating on the airfield at LAX with premises located on Imperial Highway. Of the three, only Flying Food has a short term lease. In addition, two of the three companies operate out of LAWA-owned facilities and pay building rent to LAWA, including Flying Food. The third company, on a long-term lease, still owns the improvements constructed by the tenant at commencement of its lease in the mid-1990 s. In view of the scarcity of airfield land due to the relatively small footprint of LAX and to the construction of major LAWA improvements (e.g. Taxiways S, T, and R and the Midfield Satellite Concourse), staff is evaluating the current use of several on-airport facilities, including the use of the three catering facilities. Staff expects to conduct a competitive process for the site after this evaluation. The proposed building rental rate of $18.00 per square foot per year (PSFPY) has been agreed to by Flying Food and is in line with the rental rate of $18.17 PSFPY paid by the tenant at the only other LAWA-owned catering facility at LAX. Additionally, and for Page 2 Flying Foods at 6751 W. Imperial Flwy.

4 comparison purposes, LAX cargo warehouse building rates average about $18.00 per square foot per year. The table below provides a summary of the proposed terms: Item Current Lease First Amendment TERM: Effective Date Expiration Date 5 years January 31, 2011 January 30, years January 31, 2016 January 30, 2018 DEMISED PREMISES1: Land Paving Building 134, ,144 32, , ,144 32,090 RENT 2: Land rate3 Paving rate Building rate Annual Rent $2.63 $0.38 $16.98 $936,530 $2.81 $0.38 $18.00 $993,501 Notes 1. Measurements are in square feet. 2. Rates listed are on a per square foot per year basis, and are rounded. 3. The land rental rate is based on Board-approved rates and will increase to $2.99 PSFPY in year 2 of the amendment. Action Requested Staff requests the Board approve the First Amendment, approve the proposed building rental rate, and authorize the Executive Director to execute the First Amendment after approval by the Board and the Los Angeles City Council, and upon approval as to form by the City Attorney. Fiscal Impact Approval of this action will generate an estimated revenue to LAWA of approximately $2,001,000 over the extended term. Page 3

5 4. Alternatives Considered Take No Action Taking no action is not recommended. Approval of the proposed Lease will enable Flying Food to continue its in-flight catering operations, serving mostly international airlines at LAX. Initiate a competitive process for the site Staff recommends deferring a competitive process to allow time to evaluate the long-term uses of this site and other airfield land used by in-flight catering services. 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 involving negligible or no expansion of use and/or alteration or modification of the facilities or its operations beyond that previously existing or permitted 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. This item is subject to approval as to form by the City Attorney. Actions taken on this item by the Board of Airport Commissioners will become final pursuant to the provisions of Los Angeles City Charter Section 606. Flying Food Group Pacific, Inc, will comply with the provisions of the Living Wage/Service Contractor Worker Retention Ordinances. Leases are not subject to the Small Business Enterprise Program. Flying Food Group Pacific, Inc. is required by contract to comply with the provisions of the Affirmative Action Program. 7. Flying Food Group Pacific, Inc, has been assigned Business Tax Registration Certificate No Flying Food Group Pacific, Inc. is required by contract to comply with the provisions of the Child Support Obligations Ordinance. 9. Flying Food Group Pacific, Inc. has approved insurance documents, in the terms and amounts required, on file with Los Angeles World Airports. 10. This action is not subject to the provisions of City CharterSection 1022 (Use of Independent Contractors). 11. Flying Food Group Pacific, Inc, must submit the Contractor Responsibility Program Pledge of Compliance and comply with the provisions of the Contractor Responsibility Program prior to execution of the amendment. Page 4

6 12. Flying Food Group Pacific, Inc. must be determined by the Office of Contract Compliance to be in compliance with the provisions of the Equal Benefits Ordinance prior to execution of the amendment. 13. Flying Food Group Pacific, Inc. will be required to comply with the provisions of the First Source Hiring Program for all non-trade LAX Airport jobs. 14. Flying Food Group Pacific, Inc. must submit the Bidder Contributions CEC Form 55 and comply with its provisions prior to execution of the amendment. Page 5