Metropolitan Airports Commission

Full Commission

Regular Monthly Meeting Minutes

Tuesday, January 18, 2011

1:00 pm

www.metroairports.org

METROPOLITAN AIRPORTS COMMISSIONFULL COMMISSION MINUTES

REGULAR SCHEDULED MEETINGTuesday, January 18, 2011, 1:00 p.m.

Room 3040 Lindbergh TerminalWold Chamberlain Field

Minneapolis-St. Paul International Airport

Call to OrderA Regular meeting of the Full Commission, having been duly called, was held Tuesday, January 18,2011, at Room 3040 Lindbergh Terminal, Wold Chamberlain Terminal, Minneapolis-St. PaulInternational Airport. Chairman Lanners called the meeting to order at 1:00 p.m. The following werein attendance:

Commissioners: Boivin, Geisler, Landy, McKasy, Monaco, Peilen, Rehkamp, Sigel, Williams andChairman Lanners

Staff: S. Busch, J. Hamiel, D. Probst, T. Anderson, T. Anderson, J. Nielsen, J. Felger,S. Douma, J. Kosta, E. Johnson, J. Greer, M. Kilian, G. Schmidt, P.Rasmussen, G. Warren, C. Leqve, R. Fuhrmann, P. Hogan, E. Wilson, B. Rief,S. Wareham, M. Willis, B. Rineer, B. Zwart, E. Podniecks, D. Ruch

Others: Kevin Kirchberg, DNC; Manny Perez, Subway; Frederick Estes, Estes Gifts;Merland Otto, City of Mpls.; Zachary Donotghn, Roxanne Viska, Sarah West,Sharon Adler, Joe Waller, Ellie Maalou, Pat Bandners, Host, Int'l; Molly O'Brian,Kerry Panner, Caribou Coffee; Joel Burger, Wexford Golf; Cheng Ler, AeroService Group; Roger Schwandiner, SSP America; Arthur Spring, SmarteCarte; Andria Stegeman, TSA; Bing Le, Aero Service Group; Pat Doyle, StarTrib; Robert Friskney, Dick Saunders, SMAAC; Jeff Davidman, MaryLoeffelholz, Delta

OPEN FORUMNo one requested to speak.

CONSENT ITEMSThe following Consent items were approved by roll call vote as indicated.

COMMISSIONER LANDY MOVED AND COMMISSIONER SIGEL SECONDED APPROVAL OFTHE CONSENT AND COMMITTEE AGENDA ITEMS AS LISTED BELOW. The Motion carried onthe following roll call vote:Ayes: Ten: Commissioners: Boivin, Geisler, Landy, McKasy, Monaco, Peilen,

Rehkamp, Sigel, Williams and Chairman LannersNays: NoneAbstain: NoneAbsent: Four Commissioners Harris, McClung, Nelson, and Stenerson

Reports1. Passenger and Operations Summary

Full Commission MeetingJanuary 18, 2011

Page 2Financial Report - Board File No. 13382Approval of the total amountof $2,404,099.00

Airport Leases - Board File No. 13383

Minneapolis-St. Paul InternationalApproval of a lease agreement with Enterprise Leasing Company in support of their on-airport rentalauto operations. Approval of a lease agreement with Delta Airlines for the building known as BuildingF effective February 1, 2011 to January 31, 2016. Approval of an Amendment to retail concessionsBatch 16 with Delaware North Companies to re-concept Nevada Bob's Golf with Sugar Pop, Toys &Treats. Approval of acknowledgement and consent to Amendment 3 and 4 between Delta Air andA.P.T.A. for operation of the shoeshine concession on Concourse G.

Crystal AirportApproval of a new lease between MAC and Cities of Brooklyn Center and Crystal to develop a wildlifearea and environmental park on property owned by MAC.

Anoka County-Blaine AirportApproval of a lease transfer from James Emerson and Gary Norman, Lot 26A to Goro Sky Aviation,Lino Lakes, MN.

Lake Elmo AirportApproval of a lease transfer for Lot 6B, Lot 9B, and Lot 11E to Alan Thompson, Clinton, IA.

APPROVAL OF THE ABOVE TO AUTHORIZE THE LEASES, CONSENT TO TRANSFERS,AMENDMENTS, ASSIGNMENTS, CONSENT TO SUBLEASES, LICENSES AND OTHER ACTIONSAS INDICATED.

ALL SUCH APPROVALS ARE SUBJECT TO PAYMENT OF ALL RENT OR MONEY OWED THECOMMISSION, COMPLIANCE WITH THE TERMS OF ALL EXISTING AGREEMENTS ANDPAYMENT OF APPLICABLE ADMINISTRATIVE FEES, IF ANY,

AUTHORIZE THE EXECUTIVE DIRECTOR OR A DESIGNATED REPRESENTATIVE TOEXECUTE THE NECESSARY DOCUMENTS.

Approval of MinutesApproval of the Minutes for the Regular Scheduled December 20, 2010 Meeting.

Finance, Development and Environment Committee - Board File No. 13379A1 Reports

a. Budget Variance Report - November 2010b. Accounts Receivable Summaryc. Change Management Policy and Project Status Reportd. Professional Service Authorization (PSA) Quarterly Report

A2 Final Payments - MAC Contractsa. Taxiway C-D Complex - Phase 5b. 2010 Pavement Joint Sealingc. 2010 Valet Garage Flammable Waste Trap Replacementd. Concourse G Expansion BP#3 - Site Preparation

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Page 3A3 Bids Received - MAC Contracts

a. Electrical Infrastructure Rehabilitation - Phase 3A4 Airlake Airport Encroachment EasementA5 Purchasing and Accounts Payable Audit Follow-UpA6 Consultant Services EvaluationA7 Construction Program Status UpdateA8 2010 MAC Energy Conservation Program and Savings UpdateA9 Debt Service SummaryA10 2010 Financial Audit Plan - BKD, LLP

Management and Operations Committee - Board File No. 13380B1 Professional Service Authorization (PSA) Quarterly ReportB2 Request to Renew Oracle Enterprise One Maintenance AgreementB3 Caliber Kennels - Canine Training Professional Service Authorization (PSA) RequestB4 Recommendation to Extend the Smarte Carte Luggage Cart AgreementB5 Consultant Services EvaluationB6 Off Airport Parking UpdateB7 NON-AGENDA - Recommendation to Award a Contract for a Hosted Software System to the

MAC Conference Center

Human Resources and Affirmative Action Committee - Board File No. 13381C1 Ratification of Labor AgreementC2 2011 Wage Structure AdjustmentC3 Follow-up on HR Policies - 6-03 Sick Leave and 10-05 Severance PayC4 DBE Concessions UpdateC5 Diversity Quarterly Update

Commissioner Rehkamp commented on the minutes of item C3 of the HRAA Committee meetingstating that his intent was not to do away with either sick leave or severance but to encourage staff tocontinue to look at alternatives.

DISCUSSION ITEMS - Board File No. 13384Proposed Concessions Lease Extensions (Deferred from December Meeting)Eric Johnson, Director of CMAA, stated at the December Commission meeting staff asked that thisitem be deferred to January, 2011. Staff was requested by Delta to visit New York to view the newconcession offerings by OTG Management, a new concessions company that developed concessionsat both JFK and LaGuardia Terminals. He stated it was a very interesting program and different thanwhat has been done at MSP. Staff had a chance to talk to the operators, look at the space and thenfollowing that review, discuss the opportunity internally. It was staff's decision to continue with theproposed concession lease extensions. He reiterated that Host has requested lease extensions forall fourteen of its Lease Agreements, which are grouped and leased together in batches. Theproposed extension plan will allow staff the flexibility to work through the issues related to the LongTerm Comprehensive Plan (LTCP) in regards to the entire rebid and re-planning for the concessionsprogram.

Mr. Johnson provided an MSP Concession Lease Extension Term Sheet for review byCommissioners. The Term Sheet provided information regarding investment funds, lease termextensions, percent rent and MAG payments, supplemental rent, reinvestment projects, consortiumfees, environmental language and audit language.

Full Commission MeetingJanuary 18, 2011

Page 4The following comments and questions from Commissioners were as follows:

• Was the La Guardia OTG project a reconstruction of the old concession or a new one?• Host is offering $5 million of reinvestment funding for the new concessions program?• In regard to the lease extension, the Commission can terminate the lease at any point and

rebid if so desired?• What is going on with SSP America?

Cheng Lor, Aero Space Group and Roger Schwandtiner, SSP America, were asked to address theCommission. Mr. Lor stated that there was a meeting with MAC staff where concerns were expressedregarding Batch 2 improvements that were made. It was a win-win situation for both operators, andMAC staff agreed Batch 2 would be extended to December 31, 2017 under the same terms.Additionally, Mr. Lor indicated that they were interested in rebranding Houlihan's and were indiscussions with staff regarding that process as well.

Questions and comments continued:• Is there a downside to having Batch 4-7 out to 2017 when MAC will have the G Concourse

and all the other batches up in 2015? Is that significant?• Don't appreciate receiving a lengthy term sheet that the Commission hasn't read prior to a

decision.• Will there be an additional food and beverage unit at the Terminal 2 facility? This would be an

opportune time to negotiate what staff would want at Terminal 2.• There was a delay in the process because of the New York trip. What were your observations

in concluding that the lease extension is the right approach? What did you learn and how wasthat applied?

• With regards to DBE percentages. Any commitments in working on that and making itmeaningful?

Joe Waller, HMS Host, addressed the Commission and explained that the big advantage for theairport with this lease extension proposal is that it eliminates uncertainty in today's unstable economicenvironment, while at the same time allowing Host to reinvest in new food and beverage conceptswhich will enhance MAC's concessions program. Host wants to keep MSP's excellent ranking byproviding these new concepts.

Mary Loeffelholz, Delta, stated that Bill Lentsch of Delta has been charged with making MSP theairport of preference for Delta Airlines travelers through the Midwest. One of the goals in Delta's planis to be number one in JD Powers. Delta has invested over $5 million in continuing investments incustomer facing technology improvements and amenities. Delta and MAC have a difference inphilosophy and opinion in whether or not an action needs to occur today or in six months about thedirection of this airport. She provided an overview of the OTG Management concessions layout atJFK. Delta is requesting that the Commission take a defined period of time to identify the impacts ofthe LTCP. She recommended that staff and Delta work together and return with a defined period oftime that the Commission would set with a clear recommendation on the impacts and course ofaction.

Questions continued:• Is there an issue of space with the OTG Management layout?• What kind of information would the Commission have about the LTCP to allow a more

responsible direction?• What are the pros and cons of waiting six months?

Full Commission MeetingJanuary 18, 2011

Page 5• Host has done an excellent job. Don't see a reason to change concession management at this

time.• Is there anything that has been done in New York that cannot be done here even if we

proceed with the Host extension?• Did New York abandon existing concessions?• What is the revenue cost if the Commission waited six months?• Have there been any discussions with Host regarding their efforts to increase MAC's DBE

percentages?• Need more detail. Has never seen anything presented that shows what is going on or what

staff is thinking about and how that might impact current vendors that are along the mallconcept.

Joe Waller, HMS Host, responded that he will personally commit that Host will find a way to improveDBE percentages.

COMMISSIONER LANDY MOVED AND COMMISSIONER PEILEN SECONDED APPROVAL OFTHE EXTENSION OF ALL THE FOOD AND BEVERAGE, RETAIL, NEWS AND GIFT LEASESINCLUDED IN BATCHES 1,1A,3 AND 8,9-15, AND THE TWO STAND ALONG CARIBOUAGREEMENTS TO DECEMBER 31, 2015 AND EXTEND BATCHES 4-7 TO DECEMBER 31, 2017WITH ALL THE TERMS AND CONDITIONS OUTLINED; AND THAT THE EXECUTIVE DIRECTOROR A DESIGNEE BE AUTHORIZED TO EXECUTE THE NECESSARY DOCUMENTS. The Motionfailed on the following roll call vote:

Ayes: Seven Commissioners: Geisler, Landy, McKasy, Monaco, Peilen, Sigel,and Chairman Lanners

Nays: Three Boivin, Rehkamp, WilliamsAbstain: NoneAbsent: Five Commissioners Harris, McClung, Nelson, and Stenerson

Staff was directed to bring this issue back to the M&O Committee and provide something in writingregarding Host's commitment to increase the DBE percentages, and details as to how theseconcessions will be laid out.

NEW BUSINESS - Board File No. 13385There was no new business.

OLD BUSINESS - Board File No. 13386There was no old business

ANNOUNCEMENTS

Chairman Lanners adjourned the meeting at 2:48 p.m.

Materials for this meeting are available at the following website:http://www.metroairports.org/mac/meetings/fc.aspex

Full Commission MeetingJanuary 18, 2011

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