Photo by Jeff Kramer via Flickr Creative Commons
Time for some new concessions at LAX.
While some union workers at Los Angeles International Airport were busy today protesting a contractor’s plan to terminate their healthcare benefits, the Los Angeles Board of Airport Commissioners was busy approving a $331 million contract for the management of restaurants and shopping in two terminals, and the Theme Building.
Westfield Concession Management, a subsidiary of the Australia-based developer Westfield Group, was awarded the 17-year contract in a unanimous vote that guarantees Los Angeles World Airports (LAWA) a minimum of $17.7 million in revenue the first year concessionaires are operational, and a $331 million payday over the life of the contract.
The agreement stipulates that Westfield, a company already running concessions at nine other airports, will develop, lease and manage stores and restaurants at the Theme Building (with restrictions because of its historical landmark designation), in Terminal 2, and at the Tom Bradley International Terminal, including the "Bradley West" addition that's being built.
There will be a a two-year period granted to Westfield to develop the spaces and its "Wselect" concessionaires, with final approval resting with the Board of Airport Commissioners and the city attorney.
To avoid conflicts of interest, Westfield will not be operating any of the units, rather, the company intends to manage its concessionaires like a mall, and expand retailers to include businesses that are unique to Los Angeles.
The company and its concessionaires are expected to invest at least $82 million in initial improvements. LAWA will have the power to terminate the agreement if revenue streams from concessions are not meeting expectation... after 10 years.