A Los Angeles City Council committee approved Tuesday a $331 million contract for management of restaurants and shopping at two Los Angeles International Airport terminals and the LAX Theme Building.
The Trade, Commerce and Tourism Committee unanimously approved the 17- year contract with Westfield Concession Management, a subsidiary of the Australia-based real estate and mall developer Westfield Group, which owns malls in Culver City and Century City.
The terms of the contract require Westfield and its concessionaires to invest a minimum of $81.9 million for initial improvements and $16.7 million for refurbishing halfway through the contract.
The agreement guarantees Los Angeles World Airports a minimum of $17.7 million for the first year concessionaires begin operating at the airport, and $331 million over the life of the contract. Under the agreement, Westfield will develop, lease and manage stores and restaurants at the Tom Bradley International Terminal, including the $1.5 billion Bradley West addition under construction, Terminal 2 and the Theme Building.
A Westfield executive told the committee restaurants and other concessions would be ready to operate by a scheduled early 2013 grand opening for the Tom Bradley West International Terminal. The agreement allows Westfield a two-year period to develop spaces and select concessionaires, with final approval going to the Board of Airport Commissioners and the city attorney.
During the remaining 15-year term of management, Westfield will be charged with monitoring the restaurants, stores and other vendors for quality, service and financial performance.
LAWA selected Westfield, in part, because the company runs concessions under similar terms at nine other airports in cities including Boston, New York, Chicago, Houston and Washington, D.C.
The Airport Commission awarded concessions contracts for terminals 4, 7 and 8 last May. Host International will provide concessions in terminal 4, with outlets including Camanile, Cole's, 8 oz. Burger Bar, L.A. Gourmet Street Truck, La Provence Patisserie & Cafe, Real Food Daily and Starbucks.
CMS/Camacho Ventures, which manages eateries such as Seven Grand, BLD, Loteria Grill, Marmalade Cafe, The Counter, Yogurtland and Coffee Bean & Tea Leaf, will manage terminals 7 and 8.
The Westfield contract marks a break from the model of leasing directly with the vending company. Westfield will manage its concessionaires more like a mall.
Los Angeles World Airports Deputy General Manager for Commercial Development Debbie Bowers told the commission the new model is likely to expand the pool of concessionaires “beyond the pool of usual suspects,” and out- perform the other models.
Westfield co-Chief Executive Officer Peter Lowy told the Airport Commission in January the company's goal is to choose retailers that are unique to Los Angeles. LAWA can terminate the agreement after 10 years if the revenue stream from the concessions is not meeting expectations.
City Councilman Bill Rosendahl asked if the new Bradley terminal would have free Wi-Fi Internet. Officials said Westfield would be providing free wireless access to the web.