Trade, Travel and Tourism Committee

Summary

The Board of Airport Commissioners (BOAC) is recommending the City Council approve the termination and partial termination of several concession agreements in Terminal 5 at Los Angeles International Airport (LAX). This action is necessary to facilitate the Terminal 5 Renovation and Reconstruction Project. The total cost for these termination payments will not exceed $25,000,000. The affected concessionaires include ON/Dakota JME LAX 8589 Farmers, ON/Dakota JME LAX 8549 Pucks LLC, Hudson-Magic Johnson Enterprise-Concourse Ventures LLC, LAX Retail Magic 2 JV, LAX Retail Magic 3-4 JV, Areas USA LAX LLC (two agreements). These agreements were originally set to expire in 2023 and were extended due to COVID-19, with a further extension to 2029 anticipated to cover major events. However, the T5 renovation project necessitates their early closure. The termination payments are intended to compensate these businesses for lost anticipated revenue and maintain positive business relationships. The action is deemed exempt from CEQA. Individual termination payments include: ON/Dakota JME LAX 8589 Farmers ($3,855,458), ON/Dakota JME LAX 8549 Pucks LLC ($1,550,837), Hudson-Magic Johnson Enterprise-Concourse Ventures LLC ($4,950,200), LAX Retail Magic 2 JV ($528,957), LAX Retail Magic 3-4 JV ($157,597), Areas USA LAX LLC (LAA-8546) ($2,419,463), and Areas USA LAX LLC (LAA-8547) ($4,537,488).

Citizen Impact

This action will result in no direct cost to residents as the termination payments will be funded by existing appropriations for the Terminal 5 Renovation Project. While some concessions will be temporarily unavailable during construction, the project aims to modernize airport facilities, potentially improving the passenger experience in the long term.

Confidence

high

Summary

This item concerns the Seventh Amendment to Concession Agreement LAA-8647 with DFS Group LP for duty-free merchandise concessions at Los Angeles International Airport (LAX). The amendment adjusts the Base Rent terms for the Per International Passenger Payment (PIPP) element and the Minimum Annual Guarantee (MAG) element. The changes were requested by DFS Group LP due to ongoing challenges in the airport concessions business environment post-COVID-19, including lower international passenger enplanements and duty-free spending, particularly from Chinese travelers. These factors, combined with escalating business costs and an unfavorable MAG calculation, have led to significant cumulative losses for DFS. The amendment will:

• Adjust the PIPP Element: Exclude international passenger enplanements at the TBIT West Gates from the calculation, focusing only on TBIT international traffic. This exclusion will be effective from April 1, 2025, until China (PRC) annual traffic reaches 90% of 2019 levels.
• Suspend MAG: Suspend the Minimum Annual Guarantee for one year and three months, from April 1, 2025, to June 30, 2026. Starting July 1, 2026, the MAG calculation will reset to 90% of the prior year's rent.

The Board of Airport Commissioners has approved this amendment and determined it is exempt from CEQA. The City Council's approval is required.

Citizen Impact

This amendment is expected to reduce Los Angeles World Airports' (LAWA) revenue by approximately $11,000,000 per year until international travel from China recovers. While this provides temporary relief to the concessionaire, it represents a direct financial impact on airport revenue that could affect future investments or services.

Confidence

high

Summary

This item concerns the First Amendment to Contract DA-5602 with Amadeus Airport IT Americas Inc. for software license and maintenance support for the PropWorks revenue invoicing system used by Los Angeles World Airports (LAWA).

The amendment will extend the contract term through December 31, 2028, with two one-year renewal options. It also increases the contract authority by $402,781, bringing the new total not to exceed $777,781.

The PropWorks software is critical for LAWA's financial operations, including invoicing, collections, aviation statistics, and operational data, and is integrated with SAP. Discontinuation would pose significant risks to these functions. The contract was initially awarded on a sole-source basis due to its integration with existing systems, and a future competitive process is being evaluated.

The costs for license fees are $109,937.94 and for optional services are projected at $292,842.50 over a three-year period. Funding is available in the FY2025-2026 LAWA Operating Budget and will be recovered through landing fees and/or terminal rates and charges. The action is exempt from CEQA.

Citizen Impact

This amendment ensures the continued operation of the airport's critical revenue invoicing and collection system. Residents will not see a direct financial impact as the costs are recovered through airport fees and charges, not general taxes.

Confidence

high

Summary

The City Council is set to approve a five-year contract with Lutron Services Company Inc. for technology support and software maintenance of the proprietary Lutron Quantum Lighting Control and Energy Management System at Los Angeles International Airport (LAX). The contract has a maximum cost not to exceed $1,200,000, with two additional one-year renewal options. The base annual rate for the bundled Technology Support Plan and Software Maintenance Agreement is $121,072.

Scope of Services: Lutron will provide 24/7 technical phone support, 72-hour onsite/remote response for troubleshooting and diagnosis, replacement parts, remote diagnostics and programming, preventive maintenance, system optimization, and onsite training.

Locations Covered: The system manages lighting across key LAX facilities, including the Tom Bradley International Terminal, Terminals 1, 1.5, 2, 3, 4, 5, 7, and 8, and the Central Utility Plant.

Funding & Exemptions: Funding will come from the LAWA Operating Budget, recovered through landing fees and other airport revenues, ensuring no impact to the City's General Fund. The item includes an administrative exemption from CEQA requirements and an exemption from competitive bidding due to the proprietary nature of Lutron's system. The Board of Airport Commissioners (BOAC) approved this contract via Resolution No. 28263 on November 13, 2025.

Citizen Impact

This contract ensures the continued efficient operation of lighting systems at LAX terminals, contributing to passenger safety and energy management. Costs are covered by airport operations, meaning no direct impact on city taxpayers.

Confidence

high

Summary

The City Council is asked to approve a Personal Services Agreement with CSDA Design Group for a Residential Sound Insulation (RSI) Mitigation Program in San Pedro. This five-year agreement, valued at $1,765,000, is designed to fulfill Mitigation Measure NOI-2 from the 2008 China Shipping Container Terminal Project Environmental Impact Report, which requires soundproofing for noise-impacted residential structures.

Program Details:

• Scope: CSDA Design Group will provide comprehensive program planning, public outreach, acoustic testing, engineering, design, and construction administration services.
• Affected Areas: Approximately 65 eligible residences in the Knoll Hill and W Amar Street/N Palos Verdes Street communities of San Pedro will receive sound insulation (e.g., windows, doors, insulation, HVAC).
• Timeline: The program is scheduled from April 2026 to December 2028, with construction administration anticipated in 2028.
• Funding: The Port of Los Angeles Harbor Department is financially responsible for all costs, with funds allocated across fiscal years through FY 2030/31.
• Compliance: The project is deemed administratively exempt from the California Environmental Quality Act (CEQA). The agreement includes a 25% Small Business Enterprise (SBE) participation goal, which is met by the prime contractor and several local subconsultants.

Citizen Impact

This program will directly benefit residents in approximately 65 homes in specific San Pedro communities by providing free sound insulation to mitigate noise impacts from Port operations, significantly improving their quality of life. The costs are covered by the Harbor Department, ensuring no impact on the City's General Fund or city taxpayers.

Confidence

high

Summary

The Board of Harbor Commissioners (BOHC) is proposing amendments to six existing agreements for as-needed air quality services. These amendments will extend the term of the agreements with Burns & McDonnell Engineering Company, Inc., Ensafe Inc., ICF Incorporated, L.L.C., Ramboll Americas Engineering Solutions, Inc., Starcrest Consulting Group, LLC, and Tetra Tech, Inc. from three years to five years, extending their expiration from April 11, 2026, to April 11, 2028. Additionally, the compensation for Starcrest Consulting Group, LLC will be increased by $600,000, bringing their total not-to-exceed amount to $3,100,000. The total not-to-exceed amount across all six agreements will be $7,800,000. These services are crucial for supporting the Harbor Department's air quality programs, including the Clean Air Action Plan, zero-emission technology initiatives, and regulatory compliance. The proposed actions are administratively exempt from the California Environmental Quality Act (CEQA).

Citizen Impact

These amendments extend contracts for essential air quality services at the Port of Los Angeles, ensuring continued efforts to improve air quality and implement environmental programs. No direct financial impact on residents is anticipated as the funding comes from the Harbor Department's budget, not the General Fund.

Confidence

high

Summary

This item concerns the Second Amendment to Reimbursement Agreement No. 21-9795 between the City of Los Angeles Harbor Department (Harbor Department) and Bellwether Financial Group, Inc. The amendment extends the duration of the existing agreement by one year, from five to six years. This extension is necessary to allow sufficient time to complete the environmental assessment for the development and occupation of Berth 44 and associated premises (the Site), which was formerly used as a boatyard. Bellwether Financial Group will continue to be responsible for reimbursing the Harbor Department for 100% of staff and consultant costs related to the environmental assessment, with the exception of costs associated with assessing contaminated soil/water impacts and historical resources. The total estimated cost for the environmental assessment has increased from $375,000 to $525,000, and Bellwether will cover these costs. The action is considered administratively exempt from CEQA.

Citizen Impact

This agreement extension allows for the continued environmental assessment of the Berth 44 site, which is a necessary step before potential development. Residents will not directly incur costs as Bellwether Financial Group is fully reimbursing the Harbor Department for these environmental assessment expenses.

Confidence

high

Summary

This motion requests a comprehensive report from the Department of City Planning, in coordination with other city departments and LAWA, within 90 days. The report will investigate the environmental, public health, and equity impacts of residential development near Los Angeles International Airport (LAX). It will specifically examine noise and emissions exposure, disproportionate burdens on low-income communities, and best practices for protecting residents in high-exposure areas. Additionally, the report will assess the feasibility and implications of establishing an Airport Noise-Contour and Environmental Exposure Overlay Zone to guide future land-use decisions, potentially including tiered subzones and specific mitigation measures.

Citizen Impact

Residents living near LAX will benefit from a comprehensive review of health and environmental risks associated with airport operations. The report aims to inform future land-use decisions, potentially leading to better protections and healthier living conditions in impacted neighborhoods.

Confidence

high