Trade, Travel, and Tourism Committee - 8/1/23
ahead and get started. Welcome to our regularly scheduled meeting of the trade, Travel and Tourism Committee Councilwoman Tracy Park chair of the committee. Um Madam Clerk, If you would please call the roll. Councilmanark Council member Park Present Council member Coster Council member, Sato Mayor Martinez, three members present and aquarium, Madam chair. Thank you very much, so that brings us to public comment . Members of the public wishing to give public comments can sign up at the kiosk in the back of the room. You will be given one
minute for general public comment and up to two minutes for multiple items. So with that , if we could have someone, Mr City attorney or Madam clerk go overhe comntules. We will go ahead and take public club public comment. Ah as the as the chair stated, you'll get one minute for general public comment two minutes from multiple agenda items When speaking on agenda item. Please be on topic if you speaking on general public comment, please address your comments to the general jurisdiction of this committee. Ah if you get off topic, we'll give you one brief warning. And if you don't get
back on topic and your time will be forfeited. Okay? So if we could have the first speaker come up, please. Donald Harlan. Here, Mr Allen. You have one minute for general public comment and two minutes for multiple items for a total. Yes I'd like to speak on Jan. Items 12345. 67 I'm really concerned
about the port Los Angeles. That's my property. It's not owned by the city of Los Angeles never has been never ever just not owned by the state of California. Never ever Ah, there's a problem with that board of Harbor commissioners. There's a bunch of foreign agents in there trying to make deals at the ports. You wonder
why the supply chain came under attack or there was a big problem there. Look no further. Ah there is serious threat to national security Agenda. Item Number two was concerned about some of the contracts you guys are making. I noticed some of
the names that they're involved. That thesere enemieso the United States. You guys are making contracts with or you guys are giving jobs to literally they want to attack and kill everybody in the United States, and they don't need jobs from you guys. I'm really concerned that over in the port of Los Angeles a lot of people showed up like that those specific enemies Ah, the Vincent number. Five Visit. Thomas Bridge doesn't need to be reconfigured. There's an attempt there to rearrange the off ramp so they can fit Extras piece of parcel Parcel property or try and figure out who owns the property. Those people over
there in the portal Los Angeles are just pick a ble. Uh, they don't belong there. All those new Buildings they built over there are unlawfully built. I'd
say most of the houses and that peninsula are like that. You guys have a real serious problem over there in the port of Los Angeles? This isn't something for you guys to be fucking with. It's not something for you guys to be saying, Hey, I want to build stuff. This is something very serious the entire world's economy. Is jeopardized by you guys fucki aroun Ah those cruise ship companies need to go to I seen them breaking into the pipelines to steal oil. There's a big problem over there.
They've seen him undoing the pipelines reconfiguring and stealing oil. Yeah they don't have enough money to run their their, uh, cruise ship business. They're in big trouble. Um also the airports. There's some concern about, uh. The who owns
the airport and whether or not somebody shoulbellowed to build their or whether or not somebody is allowed to sell concessions and agenda. Item number six. Ah I'm really concerned about the contracts over by the airport. Uh there's a lot of international exposure and a lot of really, really bad guys. Uh, You guys aren't equipped to really even take on or understand. Uh and, uh, you
know that there's a big immigration problem over the airport to I would look at all these problems going on over there with the tourism business , and I would be really concerned. I think that aot o this stuff as being overdone it maybe needs to be stopped. Ah and, uh, I don't like the investments, the people that are investing over there. Uh, there are no good. I have a big, empty defense defense industry over there. I have somebody trying to
sell nuclear triggers to Disney and Raytheon. And there's no business in Raytheon. There hasn't never been Those buildings have always been empty , Mr Harland Okay for your a goatuppe please. If you'rek is gonna speak on today got goat puppet. What are you going to speak on? Well all the goddamn items in general car, man. Alright, three minutes. Go
ahead. And again we look at number six and seven. Duty free. Now what the fund does duty free mean That means a bunch of rich foreigners come in and don't pay taxes on it. That's right. Yes it wouldn't have been nice if you would give Angelenos are duty free shopping opportunity in the city. Get rid of that sales tax. Then it would be duty
free. Imagine how much people would come to the L A city and buy a car if a car was duty free. So what are you going to put in here? How about a car dealership? A duty free? That's it. Tracy Park duty Free car shop. That's right, right? And Pat McCosker is backyardHow about that? Let's give her a hand to why expand the limit? Let's have unlimited duty free, so we will agree only if everything is duty free, including cars and houses. And
then we have those bastards from Kanako 76. Raising gas prices. Did you see today's gas prices? How high it's going. Why is it so high if the refinery is seven miles away from the customers? How come the same company charges? A dollar 50 less for the same fucking gas 900 miles away from here? Why? Corruption You're correct. Yes Corruption
is one thing. But the other is people like pet McCosker that sit there and drink those free beverages and stuffs his face young, young, young young young with all that pretty food and fails to recognize that these people are fucking your constituents per gallon of gas. Every 20 miles. You drive cost yo$5. Huh Another $5 another five, So they average slave or excuse me. I mean, commuter from
the Antelope Valley to here is paying an average of $5. Every 20 miles for fuel and pet. Couldn't give a fucking shit. Let's see here. Does Hugo care about that? He's for the people. No no, he won't worry, Ty because that's the how come it doesn't work? I Oh, well, that's the graphic. He's for the pple
that he's rebelling against the system here. He's he's full of sh it. You should see that car he drives it's electric and ev apes inside of it. I have a picture Tracy, where he can Vape inside the car, and he has tinted glass. Look, he's doing
it now. Yes How come goat puppet? Can't Vape inside here? Let's allow pot smoking at these meetings. Yes and again. The city is full of sh it, But I have good news. ck Caruss the building. Alright Thank
you Get a lot of checks today. Tracy next time All right. Next up. Greenspan. Anyone here signed up under the name Greenspan. Nope. Going once going twice. Okay? Next step, Jeffrey. Can we stop having some
disturbances out there, please? Thank you. Puppet Can you please just keep down a little bit? It's really distracting. We'd like to hear from Jeffrey. Now Jeffrey. What items would you like to general public? I think Or just the one minute go puppet, please. Second warning Quiet. No. Stop! Go! Puppet
stop! Jeffrey the floor is yours. One minute. This is my first time at, uh This, uh, subcommittee I go to City Hall and I enjoy Seeing the administration of the machine. I'm trying to learn a little bit more about, uh trade, tourm dravel, but from my looking around the room and kind of thinking about it, it seems like You guys have opportunities to do nice things with the identity you could say. Of Los Angeles among the global Globe. Um
Personally, I'm like, uh, Supporter of economic development in Brics countries, also known as Brazil, Russia, India, China, South Africa, So I would be in favor, for instance of trading with thoseountri in reasonable ways, perhaps perhaps more than others in the room or outside of the room. So I look forward to learning more about your administration. Thank you, Jeffrey. Appreciate it. Alright, Mr Herman. Mr Herman. True you're up. Not the one with 666 record, speaking on please all items and non general public comment. That means I get three
fucking minutes, right? Youave three minutes. Go ahead. So yeah, you know, item number one, for example, this fucking bullshit about California Energy Commission. What? Just right now? I said hello to you, Mr Caruso, and he told me for the record. And I'm going to do it.
As it Political stunt. Fuck you on your energy. There is no such thing as energy. If there was such a thing. Why do we have
somebody fucking homeless people sleeping on our streets absorbing all our energy? Billions of dollars milk. Through this fucking agency a then items six and seven. Duty Ludie free. Duty Ludie Booty is what you fucking people be doing what the structure for more flexible short term concession opportunities Fucking like me can't even open a concessions to sow hookah and on the streets because you fucking idiots wanna permit me. And then seven build and sell contracts, Tourism sucking Tom Bradley never had that intention. Tom Bradley wanted white like me to work.
I'm not working. So what am I doing here? I'm protecting the interests of the public people through 3 10 4776565 the record, FBI. And what do I do this because no other Tim McCosker would dare tell the FBI. Fuck
you. I'm not gonna do it your way. It's my way. No. And that's the reason Mr Timmy there knows that tourism is all fucked up. And then you go to five. Porta Los Angele. I'm sorry. Who's
speaking? You? Mr Attorney, would you say. Someone in the audience was you all right? Thank you. So number five. The portables Angeles design and service during the bid of construction well, We already know that the Department of Public Works those dumb that take these contracts. These bids have been doing a terrible job. That's the reason why we have so many settlements and so many liability charges against the city because you forced to argue the fact of right and wrong. No offense to anyone who's black.
I'm a black motherfucker, but a true wet back to nature. And I know when I'm being racially profiled by a jackass, please come on. I got I'm on my non agenda. Fucking public comment. Stacy, What's your problem? I got three minutes I'm on my fucking non agenda public coming, And now you're gonna ask me to stay on topic. I am Tell her Hugo kicker and the ass right there and tell her he is on topic. He got three fucking minutes. He's he's debating on
his mind. Why we got Vincent Thomas Bridge when you build a billion dollar fucking bridge right behind you with all those fucking humps because you don't know what the fund to do on Wednesday when you're humping yourself to work. Fuck you. All right. Thank you, Mr Herman,
seeing no other speakers in the queue that will conclude public comments. And unless there is any objection from my colleagues , I would like to move items 123 and five on consent. Questions for two Okay? Oscar. Other. Okay We will take some comments on item number two, and in that case, I will have 13 and five on consent. Madam Clerk. If you would please call the roll. Calling the road to take items 13 and five Together Council member Park Yes, Council member MMA Coster Yes, council members, Sato Martinez. Three members say
yes, those items are approved. Oo ahead and call item number two. Do we have someone here from Port of Los Angeles on Item two.
Great. Item number two is a board of Harbor Commissioners report relative to approving the First Amendment to reimbursement agreement number 2037 62 with Phillips 66 Company to reimburse the port of Los Angeles Department 100% of staff and consultant costsssociad wh the preparation of the environmental assessment. And administrative exemption from the California Environmental Quality Act. Under Article two, Section two f of the L. A City sequel guidelines. Thank you,
Madame Clark for reading the item for us, and if we could have our reps from the port of Los Angeles introduced themselves, give us a brief update on this, and then we'll turn it over to questions to council member Soto Martinez. Thank you. Chair part. Jean Seroquel, executive director Port of Los Angeles. Hi, I'm Mike Di Bernardo, deputy executive director at the Port of Los Angeles. Committee members. Thank you very much for this quarterly update opportunity from the portable Los Angeles. Yeah Yeah. You want
to start off with that counts? Committee members? Could you give me just I read the report could just give me the explanation of what improvements are being done to those four. Good afternoon Council member. Yes we're, uh, working on California state requirements to upgrade the wars to meet state standards, which is the most times the marine oil terminal improvements. So that's what this environmental document is for is to upgrade their wharf to meet the state of California requirements. Are these sort of
those big tankers that come to the Los Angeles so they are oil tankers that come in and unload products. Does is this increased their capacity to bring more oil into the region at this point? No, it's just to upgrade the wharf in order to meet the state of California standards. These are seismic standardsSafe and security, specifically, not volume inducing. So could you
explain more? What when the standards came in and what they would do? I believe the standards came in. Do you know? It's been a number of years that they've been in place and they're giving time for each of the ports to upgrade the wars to meet those standards. All right. Thank you. You're welcome. Mr McCosker Any questions on item number two, please. No thank you . So with that I would like to mr two, Madam Clerk. If you would please call the roll. Council
member Park Council member McCosker Yes, council members, Soto Martinez. Three SS Item two is approved. Great And so this takes us to, um, item number four and since you are already here at the table, uh, we are looking forward to hearing reported an update. I apologize that we didn't get to see you in June. But we are glad that you are here with us today. So the
floor is yours, Mr Sroka. C I bre record for the government? Item number four is an executive director Porta Los Angeles to provide verbal quarterly reports on the status of department activities. We also have a presentation has been uploaded to the Public Council file.
Great. Thanks, madam Chair. Uh I understand. We just have a brief amount of time today, but staff across, um your areas has asked us to talk about the following subject matter. An update on the cargo in the business of the ports. The cruise industry specifically are L, a waterfront activation and investment community ents that are aditionally held and have been activated at the poor complex.
Uh update from the standpoint of the air regulator in our Southern California region, the South Coast air quality management districts. Indirect source rule. And then finally, some key projects that council member McCosker and staff of the poor have been discussing around the McFarland Rail line and the Lomita Boulevard. Mhm. On the cargo side of our business. We had a tremendous June of more than 833,000 container units We're getting back to pre covid numbers on our cargo volume, which is extremely encouraging. The economy remains resilient GDP numbers that came out last week at 2.4% growth. Strong
employment numbers and inflation that has come down for the 12th consecutive month or all helping us with that cargo volume. The one area that is still concerning is that the country remains very high on its inventory levels. ST Louis Fed, which monitors these levels, shows us at about a 1.40 rate. That meanshat we've got about 40% more retail and manufacturing inventory in warehouses across the country, Then we do sales that go out the door. So with elevated inventories, you still don't see the amount of cargo volume coming through the ports here in Southern California or nationwide that we normally would, But with a tentative agreement reached between our longshore dock workers and their employers association Those economic uh, tail winds that we have. We see a better second half of the year than we do the first six months super encouragge waterfront projects, tremendous effort around the San Peter Waterfront Promenade phase number two, which we just had a groundbreaking on with council member McCosker 31, plus million dollars support investment and private investment coming from the West Harvard developers in that area, the front Street beautification project continues and should be completed by the spring of 2024. Making for a
beautiful multi path use and landscaping for all of our community to enjoy The Wilmington's waterfront promenade set for completion later thisear.e're targeting October feel really good about this 77 plus million dollar project, opening up more than 900 linear feet of waterfront property and Wilmington's for shopping, retail, dining and entertainment. And finally, the Avalon pedestrian bridge, which is part of activating That Wilmington's community has now received in total, some $52 million in federal and state grants to help the ports of Los Angeles and the 15 district move forward with this $65 million project, so we've not only got great support herin the city, the council district and from the Harvard apartment, but we got the federal and state government believing in what we're doing and activating that water. So it's a really good story overall. Um one other piece on the cruise business closing fiscal year. 23 We had
our best year ever for Cruz business 237 vessel calls And that means about a quarter billion dollars in GDP that goes to our local community within a two mile radius. Think of the small shops, restaurants. The hotels were the largest drive market here in Southern California for the cruise industry nationwide. This is a big deal for that industry, and it's an even bigger deal for our local businesses and community. Public events are also a cornerstone of what we try to do with the portable Los Angeles and activated once again this summer, beginning with our fleet Week on Memorial Day weekend, which you attended chair Park in addition to our cars and Stripes festivities around the Fourth of July, our count shows that we had about 10,000 visitors for firerks er thateekend. Weng then followed up with just this past couple of weekends. The
sale Grand Prix, which is sponsored by Oracle. These are 60 ft catamarans that have a six heat race televised to more than a billion people worldwide in 175 million nationwide via CBS here in the United States, so tremendous first time event ever brought about 5000 local Spectators out to the waterfront and our birth 46 at the Outer Harbor. Also looking at the waterfrontominup her. Next will be our return of the insomniac Music Festival. We expect 20,000 people to come out and these are all diverse crowds of interest from our local community members to folks in the region and broader communities that are driving in which means a lot to us again both economically and to build that great brand of the L. A
waterfront in San Pedro and. On the regulatory front as I mentioned the South Coast Air Quality Management District is studying a regulationhat uld put cap on ports emissions. Using various means, whether they be greener technologies or volume caps on the ports. We've
been working for a number of years with the air quality management district staff to try to craft a way that we can accelerate emissions reductions at the same time, well, balancing the economic impacts of the ports and the jobs Overall, I am hopeful that we'll continue to keep talking and working, but a cap on import volume will lead to other eventualities and we've got to be Reallylued into this with both the regulatory authorities as well as the folks who manufacturing equipment, tiered suppliers, etcetera and what we're working diligently on 18 different pilot projects with over 200 pieces of equipment. I report to you that right now new zero emission technology for cargo handling equipment. And heavy duty trucks remain in nascent stages our efforts every day or attempts to accelerate this technology, technological development and find the funding sources, both private sector and publicector to make these pieces of equipment commercially available. Very important half of our truckers in the poor community. Half of the 20,000 truckers who are registered to do business or small business people, and that's classified in the state of California's five rigs are less Mostar, Gen. Zero
and Gen. One Americans and the average wage of a trucker that does business in the poor complexes about $67,000. Typically by their trucks on the third hand market for about $50,000 US the newer trucks againarlyays preroduction started about $450,000 plus associated infrastructure, So we've got to go all out as a city state ports and with our private sector partners to excel, a rate this work. You have our commitment. Our resolve has never been stronger. And finally on joint city projects.
Some work that the council member report staff and I have been, uh Discussing diligently. Two big projects. One is the McFarland rail line that runs straight through our neighborhoods in lmingt's and the Council member asked. McCosker specifically asked that we developed A study around quiet zones. Trains typically have to honk their horns as they're going through neighborhoods or crossings where pedestrian and vehicular traffic will move. The idea of a quiet
zone is to put down the necessary protections, gates and lights and every other methodology possible to draw the public's attention to upcoming and departing trains. But without using that whistle without using that horn That really, really can be very loud and troublesome for families businesses alike. So we're working on that study specifically, and we think we have a clear pathway to be able to develop the technology. Is there the capabilities and the process management exist today, and those best practices can be replicated and Wilmington's. We'll make sure we have the documentation to back up. Our
beliefs were also looking at the Lameda Boulevard Punch through is as defined by council member McCosker, and that's the ability To drive industrial traffic across the East West corridor without having to go into r local neighborhoods. Now, this crosses from Lameda to Los Angeles County to Carson and back into the city of Los Angeles, so it's a multijurisdictional effort that we're happy to work on together . And under the council members leadership, we believe we can get the necessary folks to the table that need to be in on the East discussions. We'll do a study on this, along with what's Angeles Department of Transportation and other agencies. Both studies will be paid for by the Harbor Department, and we've got experts that are going all out in the areas of engineering and road design, etcetera to get us e can make good public policy decisions. And Madam chair that concludes my update here for this afternoon. As always, Mr
Soroka. It's wonderful to hear from you. And I just want to thank you and commend you for your leadership on some incredible capital improvement projects. Certainly the ports initiatives on sustainability and transportation. I just want to commend you as well for the fantastic job that you are doing to invest in and expand tourism with the waterfront project and the cruise lines. I This is the kind of work that really opens up different parts of our city to different communities. And it
is economic development work. That means a lot to me, and frankly, ought to mean a lot to all of the council members. You have an incredible champion in your council member from the 15th district. And I wanted to also just mentioned that it was wonderful to have the partnership bringing Fleet Week to Venice. Now, that was the first time we had the opportunity to do that. The ents were incredibly well attended and really reinforced.
How connected different parts of our city our and I wanted to thank you for the opportunity to do that. And I welcome the chance to Continue those efforts to bring the flavor of the ports to other parts of our city. So thank you for that. I like to turn it over to my colleagues on the committee, Mr McCosker.
Thank you very much. Thank you, Mr Stroke. I really appreciate the presentation and appreciate working with you just a couple of comments and I'll give you an opportunity to talk about something else. Rlly cl th
we worke othat you were at today. But when we look at the quiet zones, um I know we're looking very specifically at the McFarland Lane line and Wilmington's. But I want to make sure that we are basically creating a model that we can use citywide with other funding sources because we have the issue and watch we have the issue in the Valley. We have the issue across the city is not unique. It's more impact. It's
very impactful in Wilmington's, but it's not unique to, um 15. Um And on. Younow that on the on the punch through. I
mean, I really want to be really clear. I appreciate what you said about the study. The idea with this is that you will be putting together a study basically the type of material that we can find a D C and talk to our partners in D C and in Sacramento because this is going to be Uh, you know, half a billion dollars, you know, making that number up, But this is gonna be a gigantic cost, and it's not going to cost born by the by the city or entirely by the city. It's going to be a cost. That is part of the Uh,
regional infrastructure for moving goods. It also has a deep equi. And respect and social justice aspect because it's taking trucks out of the residential neighborhoods of Willington, the trucks that we all cause every time we go online and buy something And so it's really important to me. Finally, I just want to give you a chance to talk about the crane that we saw today at at the recycling facility. That was all electric. Can you tell us a
little bit was tremendous. The councilman and I attended along with many others. The unveiling of the first electric crane that will move scrap mal and product from landside two ships for international transportation. Ah Terrie and George Adams, who own essay recycling in Wilmington's. I can
read you chapter and verse as to how much recycling helps remove carbon and greenhouse gasses and necessitates the recycling industry to stay away from further mining for iron and other products that go into making buildings. And other industrial infrastructure. This is the first of five cranes in the world to be electric. And if
you could imagine in your mind's eye will send you all some pictures, but it takes 20 wheels to stabilize this crane because of the torque and the resistance that it needs to lift this heavy product and move it from shoreside chip side. But just a tremendous show here from number one, the Environmental Protection Agency who might be Bernardo and other staff from the Porter worked on very diligently in order to get the grant funding necessary. And, as you know, nascent technology typically cost more. We need to find different partners coming together in order to mobilize these pieces of equipment, but it was the atoms. Ah brothers
that put together this plan and stepped out well ahead of their competition to prove what a zero mission Crane could look like at the ports, so it's pretty awe inspiring and to see the group of people out there the representation from other elected leaders at the state County level was very inspiring today. Thanks very much, and one thing that I overlooked. I spoke too fast trying to get you guys out of here on time today. Um the council member and I have discusd aut our public access investment plan. This is still one of the first in the country to designate a public agencies operating income like the port of Los Angeles to community infrastructure and visitors serving efforts. So in this case, the port of Los Angeles we designate a minimum of 10% of our operating income.
Two projects like this to welcome folks to our waterfront , retail dining, entertainment movie shows, etcetera. One topic that's come up. That's been really big is the relocation of the USS Battleship Iowa Museum away from its current location near the World Cruise Center down to the Southern Pacific slip so we can have a more contiguous waterfront of activities. It's going to come
with a really high ticket price and a lot of work that needs to be done on dredging in the physical movement of a battleship that size, But we're going to be working in conjunction with the council members, staff and office on some public outreach as to how we want to manage this one big project with respect to the public access investment plan. There are folks in our community that don't want to see this public access money go to just one project. They have multiple interests, so we want to be sensitive to that. But more importantly, get that community feedback. So the plans of the
community aligned with support. More importantly, the plans of the ports aligned with the community. I appreciate all the time today is always happy to come back whenever you feel appropriate for updates at the court. Thank you. And I will, of
course be pushing for the U. S s. I would be moved outside of the Outside of the P A. I P funding. Um but we will talk to the communitynd we'll make sure tha we get that done.
Support remains at your service to try to do things the right way, especially with this waterfront development. That has so much momentum going for it right now. Thank you. Awesome to see. Council member Soto Martinez. No. Okay All right. Well thank you very much. Thank
you very much. Mr Soroka, Since we are keeping this item in committee, there is no action for us to take it this time. Which believe I believe brings us to items six and seven, which we will hear together. So, Madam
Clerk if you would read the items for us Item number s is a Board of commissioners report relative to approach approving the Sixth Amendment to concession agreement l a. 86 48th amendment to concession agreement l a 86 13 with you are W Airports LLC at Los Angeles International Airport to allow you are w L. Ports Airports LLC to structure more flexible short term concession opportunities. Return unusable spaces and enter into a limited duty free concession agreement in the Tom Bradley International Terminal andategical exetion from the California Environmental Quality Act. Pursuant to Article
three class 1 18 C of the L. A City sequel guidelines. Item number seven. Is a board of
airport commissioners report relative to approving a six Amendment to the concession agreement. L A. A 8647 with D. F S Group LP to allow DFS Group to return space on a case by case basis due to changes in international passenger traffic and airline relocations and extend the term by five yrs t support F. S group LPs investment to expand duty free luxury retail offerings in the Tom Bradley International terminal and categorical exemption from the sequel Pursuant to Article three class 1 18 C of the L. A sequel guidelines. All right. Thank you , Madam Clerk, Mr Jones, Um, excited for an update on concessions and other things that lawa so maybe could walk us through these good afternoon council members. I'm excited to be here to talk about these two items which work well togetr to really improve the concession program at l A X and you know what we've seen since these agreements were executed is that things have changed. Being
adaptive to reflect. As introduced. There's two items items six and seven. I won't
repeat that stuff. I'd scratch that off my notes here, but definitely the idea is to allow underperforming concession spaces to be repurposed, Um, in response to the changes that we've seen so going back to 2012 when these were originally, um, let these agreements with you are W. Their agreement is to manage the food and beverage and retail. Terminals 1236 and the Tom Bradley International Terminal at all of them just that that group Um, and they actually don't operate any of the unions act as a landlord managing and a developer that's managed. So they don't operate any of the units. Instead, they
do that through sub leases that they have, but they are expressly prohibited from doing duty free operations simply because we have a separate contract with duty free that provided them that right? And so the duty free agreement was also executed in 2012. They operate in terminals, 24567 and the Tom wrap. The DFS footprint is really focused on Tibet, though that's their flagship. That's their largest operation that most of the international traffic Terminal two used to be an international terminal, and so therefore it had a fairly large, substantial, um, concession for the duty free operator as well. The remaining
look. Locations are really just satellite that offer Limited duty free merchdise f the intermittent flights at all. But of course, as I mentioned things have changed, um and due to airline relocations, the main thing happening when the international traffic moved out of Terminal two Tom Bradley International Terminal That's left the DFS location oversized and underutilized, and likewise, at the same time when Delta moved into that facility, a lot more domestic traffic going through there, which changed the passenger demographic and also change the needs of the pastor. A lot more food and beverage services are needed. So duty free is willing to give up that space. Um and Um, turn that into what we are hoping to be to expand the food court working with you. Likewise in the Tom
Bradley International Terminal. When this was originally let there was a substantial, um specialty retail island, which is adjacent to the duty free spaces. And this is proven a little bit confusing for the passengers. Is there surrounded by all these DFS boutiques, but then right in front of them? And we've noticed that those locations have underperformed relative to the duty free spaces. Duty free has expressed interest in subleasing those spaces from your plan to invest $15 million to upgrade those facilities bring in some high high value brands that are going to resonate with the international passenger that's looking for duty free products as well as completely renovate and create a more holistic.
Centralized DFS or duty free node in that trump of having you know, just parts of it. The entire area would be focused on duty free, which we think is gonna One other thi that wve noticed on, um That we've been working on is that there's really high cost to operate at the airport. Working with our partners, Mainly you are W To try to find ways to Awesome, So unfortunately, their agreement is very specific in terms of how they can sublet agreements for the concessionaires, and so this amendment will provide them more flexibility that they can present shorter term. Um, offerings with different red structures that we think will be more attractive to the small and local businesses. And, of
cose, a . The partners, so we're very excited to have that potential as well. Um So in summary the whole concept of these two amendments is to expand the duty free offering by repurposing approximately 5000 square feet of space. Update and refresh the duty free Olympics duty free spaces in time for the Olympics. Repurpose space to add additional food and beverage.
Provide flexibility to expand participation on local businesses and then extend the DFS agreement by five years to provide an appropriate time for them to advertise the investmenty questions. Thank you very much for the update on that. I can tell you just from having spent some time recently at l a X and seeing some of the reconfiguration going on and having also spent some time traveling back through Bradley in the last couple of weeks. I think that the timing of realigning some of this really makes a lot of sense One of the things that I am excited about is law was commitment to uplift are small and minority owned businesses. So I'm wondering if
you can talko us little bit about community engagement and outreach that you're doing to the local business community to educate them about opportunities to do business in connection with this. We have a small business outreach team that is actually always actively doing that. Unfortunately we don't always have opportunities on the street. New new upcoming opportunities. So as we're
gearing up, looking forward to the opportunities that may be coming, we're definitely going to be doing a lot of outreach for that. But that doesn't mean that we're not constantly out there lookingor emple, I oughtn A C D b potential business through the other day to meet with DFS because they were looking for new merchandise and things that could be put into something that we actively do. I was in Terminal three, and we had some local business who makes cookies there the other day, and it was just great to see that women owned business in there really, really, really embedded and having an opportunity to bring products local products to the marketplace at the airport, So thank you for that update. Um you know, just curious if you are W surrenders its concession space. Are we anticipatingny kind o revenue impacts from that? Um you are. W is not planning to surrender right now.
Okay The amendment allows them to request to drop spaces that may become Unuseful in the future. We've seen this happen with some of the construction where things have been reconfigured. Um And so this this amendment just providing them that opportunity. Um so in for to answer your question directly, yes, that would mean less revenue. But it would mean you're not having a business that's struggling, um and putting them in a posionhere they would not. Requirements etcetera, So that's something that we would be willing to forgo that rent in order for a visit. Adal under. Okay, Well,
thank you for that. My follow up was going to be if that did happen. What kind of measures would we take to address it? So okay, well, good, but at the same time, there's always you know, always looking for additional spaces. All right.
Well thank you very much for that council member McCosker any questions? I appreciate the report. It's great to keep reassessing and making sure they spaces are efficient and good for the traveler and also od fors So I appreciate all of your efforts. Thanks. Thank you for your. All right. Thank you very much. I appreciate that. I would like to move that we approve items six and I think that there is a technical correction in the summary section of the report.
The expiration dates for terminals three and six. I believe should read 30th 2034, the same as Terminal one. So with that correction, I would likeo mo that we approve items. Six If you would, Madam
Clerk please call the roll. Calling the road to approve items six as amended on the CL Report Council member park. Yes Council member McCosker Council members. Soto Martinez. Yes
Decide him is approved as amended. I think we need to do that. Also for item number seven, please. The same
amendment to the expiration date or just a regular approval. Same same amendment. If it's no, It's not in two places. Not on not on
seven. Just six Thank you calling a royal to approv item number seven as is council member, Park Council member, McCosker Council member, Soto Martinez. The desk is clear, Madam chair. All right. Well thank you very much. This
meeting is adjourned. We'll see everybody next time. Nope.
2023-08-03 15:44
