By Brian Sumers, Daily Breeze
Posted: 09/30/13, 8:20 PM PDT |
Citing a lack of interest from other companies that run airport concessions, Los Angeles World Airports plans to essentially renew a contract with incumbent Delaware North at L.A./Ontario International Airport at a lower rate, according to an official document.
The deal is for two years, with three one-year options, though it can be terminated with 60 days notice by the airport operator. It will be worth about $283,000 in net revenue in the first year and could be worth as much as $701,000 over the course of the agreement, documents show. Rent will come in the form of a cut of overall revenue — 7 percent of all revenue at Terminal 2 and 10 percent at Terminal 4.
But as part of the deal to keep Buffalo, N.Y.-based Delaware North at Ontario’s airport, Los Angeles World Airports had to offer a considerable sweetener. The company will receive an allowance of $135,000 for “refurbishment” and “branding,” documents show.
“Revenue arising from the agreement will likely be materially less than historical revenues from the expiring (Delaware North) agreement,” airport staff wrote in a report.
The contract will be considered by the Los Angeles Board of Airport Commissioners at its meeting today. The airport operator manages Los Angeles International Airport and Van Nuys Airport, as well as Ontario.
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