CITY COUNCIL APPROVES DELTA LEASE OF LAX TERMINAL 5

The Los Angeles City Council on Friday approved an Amended and Restated Terminal Facilities Lease and License Agreement (Lease) between Los Angeles World Airports (LAWA) and Delta Air Lines for space in Terminal 5 at Los Angeles International Airport (LAX). The lLease restates the original 40-year term that will expire in 2025; includes terminal maintenance and operations charges agreed upon in a 2008 settlement between LAWA and the airline that was amended four times since then ; and covers acquisition of approximately $192-million of terminal renovations currently underway and slated for to be completed over the next several years and is currently underway.

The lease calls for Delta to complete its current $228,826,085 terminal renovation, for LAWA to acquire $192,002,441 for construction of non-airline proprietary elements, and for the Transportation Security Administration (TSA) to reimburse $25 million through LAWA for an in-line checked-baggage screening system. Delta will cover $11,823,644 for renovations to its proprietary areas, including airline club lounge and boarding gates. No funds from Los Angeles City’s general fund will be used.

“The City Council’s action allows LAWA and our partners to continue forward on modernizing Terminal 5 and enhancing customer service for the nearly 6.6 million domestic and international travelers who pass through the terminal each year,” said LAWA Executive Director Gina Marie Lindsey.

The lease will generate approximately $19,640,000 in revenue to LAWA during the first year, and approximately $283,190,000 over the 14 years remaining of the original 40-year term.

Delta has already completed construction of the in-line baggage screening system; replaced the outbound baggage system; renovated the U.S. Customs & Border Protection’s federal inspection facility and TSA’s passenger security screening checkpoints to shorten passenger wait times; and created approximately 800 square feet of additional space by filling the existing rotunda area under the Delta Air Lines Sky Club. The lLease calls for Delta to also renovate the ticketing/check-in lobby, baggage claim areas, boarding gates and other parts of the passenger security screening checkpoints, as well as replace 13 passenger boarding bridges. Specialty lighting, finishes and other architectural elements to improve the passenger experience also will be installed.

Construction began in 2010 and is expected to be completed within five years. As part of its own capital improvement program, LAWA recently replaced all the elevators and escalators in Terminal 5 with new systems that incorporate new energy-saving and safety features such as “sleep mode” and infra-red light sensors that help operate elevator doors. Other environmental elements include high-efficiency lighting and remodeled restrooms that feature low-flow plumbing fixtures.

Separate but concurrent to Delta’s renovations, new food-and-beverage concessions by well-known local chefs -- Lemonade (Chef Alan Jackson) and Skewers by Morimoto (Iron Chef Masaharu Morimoto) -- and a new retail shop are scheduled to open Spring 2012 in Terminal 5. These will be the first of many long-awaited, new eateries and retail shops reflecting the cuisine, cultures and lifestyles of Los Angeles that will be built throughout all nine LAX terminals through 2014.