BANKING FORUM. Metropolitan Airports Commission. Elizabeth Grzechowiak~Kate Webb. Presenters

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1 BANKING FORUM Metropolitan Airports Commission Presenters Elizabeth Grzechowiak~Kate Webb

2 BANKING FORUM OUTLINE 1/25/2017 Introduce the MAC and MSP Airport Outline MSP Airport s Concession Redevelopment Project Phase 1 and Phase 2 Discuss Concessionaire Financing Needs Review Phase 2 Timeline Discuss Bank and Concessionaire Phase 2 Financing Meetings 2

WHAT IS THE MAC? WHAT IS THE MAC? MAC is governed by a board of 15 Commissioners Eight metro Commissioners appointed by the Governor One appointed by St.

3 WHAT IS THE MAC? WHAT IS THE MAC? MAC is governed by a board of 15 Commissioners Eight metro Commissioners appointed by the Governor One appointed by St. Paul Mayor One appointed by Minneapolis Mayor Four Governor appointed Commissioners from Greater Minnesota One Governor appointed Commission Chairperson. MAC owns and operates seven airports in the metropolitan area Minneapolis-St. Paul International Airport (MSP) Six reliever airports: St. Paul Downtown, Flying Cloud, Crystal, Anoka County-Blaine, Lake Elmo and Airlake 3

4 WELCOME TO MSP! MSP is one of the nation s busiest airports with over 36 million passengers per year. MSP is an international airport, a hub for Delta Air Lines and a gateway to Minnesota and the Upper Midwest region. Additional information about MSP is available at MSP is owned and operated by the Metropolitan Airports Commission (MAC). 4

5 MSP Enplaned Passenger Growth 20,000,000 18,000, % +1.7% +0.2% +2.2% +3.5% +4.2% +2.6% 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000, MSP 16,267,579 16,541,281 16,569,829 16,934,953 17,540,551 18,273,449 18,747,615 5

6 TERMINAL 1-LINDBERGH MAP 6

7 TERMINAL 2-HUMPHREY MAP 7

MSP CONCESSIONS PHASE 1: 2016-2017 50 new concepts to open between Summer

8 MSP CONCESSIONS PHASE 1: new concepts to open between Summer 2016 and Spring Specialty Retail 14 Convenience News 15 Food & Beverage 8

9 RFP PHASE 1 CHALLENGES Financing resources for ACDBE/ small companies Costs and procurement of Tenant Payment Bonds (double bonding) Very high costs of construction, very expensive change orders MAC lease terms Relocation Capital Expenditure 9

10 MSP TOTAL CONCESSION AREA MSP Concession Area (Sq Ft) After Development Phases F&B News Retail 250, , , ,000 50, Phase I Phase II Retail 33,104 30,732 30,105 News 14,624 15,586 15,586 F&B 140, , ,710 10

11 PHASE 2: Sales of Outgoing Stores (2015) Large Sit-Downs Food Court Coffee Itasca A $ 2,711,742 Qiuzno's A $ 1,029,724 Caribou A $ 1,311,031 Ike's on Summitt F $ 3,538,446 Godfather's A $ 584,308 Starbuck's C $ 1,368,709 French Meadow M $ 6,580,853 A&W A $ 716,085 Dunn Bros C $ 764,137 Ike's M $ 5,869,707 Einstein's C $ 1,228,386 Caribou F $ 1,751,079 Rock Bottom M $ 3,720,962 Wok & Roll C $ 1,552,468 Starbuck's bag $ 1,255,423 Axel's M $ 3,102,858 Chik-fil-A C $ 2,567,616 Starbuck's M $ 2,232,554 Pei Wei C $ 1,186,037 Small Sit-Downs Wok & Roll E $ 776,700 Skol A $ 286,657 Burger King E $ 1,354,460 Varsity B $ 510,186 Burger King F $ 1,581,552 DQ C $ 825,783 LaTapenade F $ 1,664,059 French Meadow F $ 2,188,414 Taco Bell M $ 1,210,548 O'Gara's F $ 2,094,449 Burger King M $ 1,362,278 Famiglia M $ 1,767,040 Wok & Roll M $ 1,693,798 Stage Deli M $ 1,811,544 Charley's M $ 1,319,105 MSP to Go M $ 618,248 Farmer's Market bag 436,832 $ Total Sales: $ 64,573,778 11

12 CONCESSIONAIRE FINANCING NEEDS RFP to be directed towards Prime Concessionaires and operators. This includes opportunities for local operators, subtenants, licensing agreements, joint ventures and ACDBE partners. Types of partnerships: Own and Operate airport brand / non-brand proprietary Franchise Agreement Licensing Agreement Sublease Joint Venture ACDBE Partnership 12

13 MSP CONCESSIONS PHASE 2: Full Service Restaurants and Bars 4 Limited Service Restaurants and Bars New Concepts Food Court 4 Other (2 coffee units, 1 Juice Bar, 1 Snack concept) 13

14 CONCESSION SALES BY TYPE Millions$200 $ m 182m 187m $160 $ m 145m 151m 157m $120 $100 $80 $60 $40 $20 $ Retail $29,286,342 $30,104,828 $30,341,114 $32,884,736 $34,482,333 $35,199,920 $35,147,207 News $19,337,704 $19,351,813 $19,295,351 $17,717,068 $18,043,027 $18,188,316 $18,569,898 F&B $92,602,701 $95,322,397 $101,428,255 $106,591,221 $115,884,898 $129,032,670 $133,663,138 14

15 RFP PHASE 2: TIMELINE Q4 2016: Request authorization to issue RFP Q1 2017: Issue RFP Q2 2017: Mandatory Pre Proposal Conference Q2 2017: Deadline for Submission Q3 2017: Recommendation of finalists Q4 2017: Finalize agreements Q Q4 2019: Build out 15

16 SAVE THE DATE MSP Airport Leasing Information Series February 22-23, 2017 Crowne Plaza Three Appletree Square, Bloomington, MN

17 SAVE THE DATE Session 1: Understanding the RFP Process and Lease Structures Wednesday, February 22, 12:00 5:00 p.m. Join the Metropolitan Airports Commission (MAC) Team to learn about the MSP Concessions Department and upcoming Request for Proposals (RFP) opportunities. Topics will include: MSP airline and passenger demographics Airport Concessions definitions RFP process, timeline and development steps Airport Concessions Disadvantaged Business Enterprise (ACDBE) certification steps Identifying RFP resources 17

18 SAVE THE DATE Session 2: Business Outreach and Networking Thursday, February 23, 8:00 a.m. 12:00 p.m. Participants have the opportunity to showcase their business to the group with a brief presentation. Here are the details: Each person will have no more than 2 minutes to present. Our total time allows for 60 speakers. Only one presentation is allowed per company. Each speaker may use up to five PowerPoint slides. Following the presentations, participants are encouraged to network with the presenters and explore the resource exhibits on display. 18

19 CONTACT INFORMATION AND RESOURCES CONTACT INFORMATION AND RESOURCES Information about MSP is available at Business opportunities at MSP can be found at: Information on the retail cart program at MSP can be found at: Opportunities/Retail-Cart-Program.aspx Assistant Director of Concessions and Business Development Liz Grzechowiak or

20 QUESTIONS? 20

21 MAC S DISADVANTAGED BUSINESS ENTERPRISE PROGRAM Debra Johnson Contract and EEO Specialist Minneapolis-St. Paul International Airport 21

22 DISADVANTAGED BUSINESS ENTERPRISE PROGRAM (ACDBE/DBE) ACDBE Program are businesses that are engaged in the sale of consumer goods and services to the traveling public and concessionaires in the course of operating a concession. (CFR 49 Part 23) DBE Program attaches to all federal funded contracts through grant assurances. (CFR 49 Part 26) Companies must be 51% owned by a woman or minority; independent, controlled by woman or minority, and is a small business. Minneapolis-St. Paul International Airport 22

23 ACDBE/DBE OVERALL PROGRAM GOALS MAC established an 16% ACDBE overall program goal for FY Factors used in determining the goal: DBE Directory Census Data Discretionary economy increase (3%) Re-leasing program Capacity of current ACDBEs MAC established an 14% DBE overall program goal for FY Factors used in determining the goal: CIP estimates Minnesota DBE Directory Census Data Federal Dollars Received Past Participation Project Scope of Work Minneapolis-St. Paul International Airport 23

24 QUESTIONS Minneapolis-St. Paul International Airport 24

Thanksgiving Day. Name Location Hours Hours

Thanksgiving Day. Name Location Hours Hours Holiday Hours Thanksgiving Day Christmas Eve/Christmas Day & New Year's Day/New Years Eve Name Location Hours Hours Arby's T-1 Main Mall Food Court (Space LT-2170) 6a.m.-9p.m. 6a.m.-9p.m. A&W T-1 A Concourse