San Francisco International Airport agrees rent relief scheme for concessionaires

USA. San Francisco International Airport has launched a rent relief programme for concessionaires, with the retrospective waiving of Minimum Annual Guarantees (MAGs) among the measures (details below). An ordinance authorising the move was signed by city Mayor London N. Breed.

The value of the relief available to be granted under the COVID-19 Emergency Rent Relief Program is estimated at US$21.3 million and will be supported through federal CARES Act funding.

The airport joins San Francisco Port, San Francisco Municipal Transportation Agency, and the Recreation and Park Department in providing relief for commercial tenants hit by COVID-19.

Commercial tenants will benefit from the retrospective waiving of MAGs and other fees for 2020 under the newly agreed deal

“We know how hard this pandemic has hit our retailers and businesses, especially at the airport where traffic has been down significantly for months,” said Mayor Breed. “The City has worked to provide relief to our tenants where we can, including deferring and waiving fees and rent to the City. As we work our way towards recovery and travel picks up again, we are going to need these businesses to serve our visitors and residents.”

“Our entire SFO business community is critical to delivering the travel experience our passengers expect and deserve,” said Airport Director Ivar C. Satero. “We appreciate the perseverance of our concession tenants and hope this Emergency Rent Relief Program will help them to continue operating and begin the process of recovering and rehiring.”

Concessionaires usually pay the greater of MAG or a percentage of gross receipts (concession fee) along with other cleaning and infrastructure fees. Each concession lease provides for a suspension of the MAG if passenger traffic declines severely for three consecutive months. Under this provision, MAGs were suspended effective 1 June 2020 and will resume after enplanements have recovered for a period of two months.

Under the COVID-19 Emergency Rent Relief Program, the MAG is waived for the months of March, April and May 2020. In addition, all fees have been waived for April and May 2020, and all cleaning and infrastructure fees waived from June through December 2020.

Rental car tenants, whose lease structure differs slightly, have had their space rent waived for March, April and May 2020, and utilities fees waived for April and May 2020.

Concessionaires must meet eligibility rules, which include payroll and rehiring requirements that prioritise laid-off and furloughed employees at the airport.

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