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HomeMy WebLinkAbout9/21/2005 - STAFF REPORTS (18) V N A+tlgATEO\ Y c4`1FORa'P City Council Staff Report DATE: September21, 2005 NEW BUSINESS SUBJECT: AMENDMENT NO, 3 TO AGREEMENT NO. A4922 WITH SIMAT, HELLIESEN & EICHNER, INC. (SH&E) TO PROVIDE FOR THE CREATION OF AN AIRPORT CONCESSIONS DEVELOPMENT PROGRAM FROM: David H. Ready, City Manager BY: Department of Aviation SUMMARY This action will amend the existing agreement with Simat, Helliesen & Eichner, Inc. (SH&E) to provide for the creation of an Airport Concessions Development Program: RECOMMENDATION: 1. Approve Minute Order No. authorizing the City Attorney to prepare Amendment No. 3 to Contract Services Agreement No. 4922 with Simat, Helliesen & Eichner, Inc. to provide for the creation of an Airport Concessions Development Program at a cost not-to exceed $165,000. 2. Authorize the City Manager to execute all necessary documents. STAFF ANALYSIS: As the Airport embarks on an exciting and significant terminal expansion project, it does so without an overall development plan/program for terminal concessions. In addition to existing concession space, additional concession space has been identified as an outgrowth of the on-going terminal expansion. Given the rate of growth the airport is experiencing (10% in 2004, approximately 5% above the national average) it is imperative that a comprehensive programmatic approach toward concession development & management be implemented, thereby allowing the airport flexibility in the concessions it offers to our customer base. In so doing, the Airport can improve its concession revenue stream as an immediate goal and enhance/improve our customer experience. The primary goal of this proposed work is to produce a program that will Item No. 5 . /��` . City Council Staff Report September 21, 2005 -- Page 2 Arnendment No.3 to SH&E Contract allow both the new and existing concession space to complement each other and to maximize revenue generation and available space for concessions. This program will be; implemented over the next 12 month period, as the Airport continues to grow in response to passenger demand. Recently, SH&E acquired The Center for Airport Management (CAM) which specializes in airport concessions planning. CAM is the concession consultant for a great percentage of the major US airports undertaking significant contemporary concession program development. Large Hub clients include Dallas-Fort Worth, Chicago, Miami, JFK — New York, Boston, Minneapolis — St. Paul, Seattle, Houston, and Cincinnati. CAM's Medium Hub experience includes Portland, Norfolk, San Diego, Kansas City, San Jose, Chicago Midway, Jacksonville and others. Each year CAM takes on a project for a small airport, such as Shreveport, Jackson, Mobile and Eugene, in an attempt to further the industry's understanding of how to create low capital investment- high impact concession programs. CAM's extensive airport experience and proprietary database makes them uniquely qualified to perform this work. In addition, CAM's principal consultant, Mr. Sheldon Klapper, has extensive experience in this field and has presented numerous papers at industry conferences in North America and in Europe. He has co-founded and has chaired airport industry trade association committees on concessions and commercial management, and has served multiple terms on association steering committees. He is the author of the ACI handbook on airport contracting procedures and is a past Chairman of the Board of the ACI Associates. Staff believes that Mr. Klapper's knowledge of concession planning, revenue planning, and concession performance standards combined with SH&E's experience at PSP (4 years of market analysis, mode of operations and processes, in addition to SH&E's recent award of a 1 year extension at PSP for continued work within this arena) will be extremely beneficial. CAM's proposed scope of services is divided into two separate phases. A copy of CAM's proposal detailing their scope of services is attached. In Phase I, CAM will collect data and examine existing conditions at the Airport to determine who and where the customer is. This includes preparing a terminal traffic flow analysis, reviewing any existing survey data and other market research data, and compiling a detailed analysis of concession unit performance. In Phase II, CAM will develop a full set of detailed and objectively measurable operating performance standards that can be used to evaluate the performance of individual concessions. CAM will also develop a tenant improvement checklists designed to assist Airport staff in managing their tenant improvement program. The Airport considered seeking the services of a company outside of SH&E for this particular endeavor. However, staff was unable to find a single consulting firm that has both traffic analysis and concession planning divisions in-house. The CAM division of SH&E uses proprietary databases (developed over the last 20 years using concession City Council Staff Report September 21, 2005-- Page 3 Amendment No.3 to SH&E Contract related information gained from large, medium and small hub airports) to evaluate and design not only concession program sizing and tenant mix, but also to create and monitor concession operating standards. The concession operating performance standards are a core element underpinning subsequent concession tenant lease negotiations and concession process improvements that generates enhanced passenger satisfaction and airport revenue Consistent with the City of Palm Springs Procurement Ordinance (Section 7.04.030 — Special Expertise Procurement), "a contract may be awarded without competition when it is determined that an unusual or unique situation exists, in that due to experience and expertise demonstrated in prior contracts with the City a particular contractor is uniquely qualified for a particular task that makes the application of all requirements of competitive sealed bidding or competitive sealed proposals contrary to the public interest." Stuff believes it would take a joint venture of two or more firms to provide the services as proposed in the proposed scope of services. Since time is of the essence and there is a considerable cost savings associated with an otherwise fragmented approach, it is recommended that these services be incorporated into an expanded scope under Amendment No. 3. The Airport Commission recommended the City Council approval of Amendment No. 3 at its regularly scheduled Airport Commission meeting held on July 6, 2005. A copy of the minutes from this meeting is attached. FISCAL IMPACT: Funding for this project is budgeted in the current fiscal year budget (Airport Landside Development Reserve Fund). Richard S. Walsh, A.A.E., Director of Aviation Toy Butzla stant City Manager tl David H. Ready, City Managef Attachments: 1. SH&E/CAM Concession Program Proposal 2, Minutes of the July 6, 2005 Airport Commission Meeting 3. Minute Order MINUTE ORDER NO. AUTHORIZING THE CITY ATTORNEY TO PREPARE AMENDMENT NO, 3 TO CONTRACT SERVICES AGREEMENT NO. 4922 WITH SIMAT, HELLIESEN & EICHNER, INC., TO PROVIDE FOR THE CREATION OF AN AIRPORT CONCESSIONS DEVELOPMENT PROGRAM IN AN AMOUNT IS NOT TO EXCEED $165,000. I HEREBY CERTIFY that this Minute Order, authorizing the City Attorney to prepare Amendment No. 3 to Contract Services Agreement No. 4922 with Simat, Helliesen & E'ichner, Inc, to provide for the creation of an Airport Concessions Development Program in an amount not to exceed $165,000, was approved by the City Council of the City of Palm Springs, California, in a meeting thereof held on the 21'� day of September, 2005. JAMES THOMPSON City Clerk SH&EInternational -Air Transport Consultancy PROPOSED PROFESSIONAL SERVICES AGREEMENT BETWEEN PALM SPRINGS INTERNATIONAL AIRPORT AND THE CENTER FOR AIRPORT MANAGEMENT LLC (A Division of SH&E) CONCESSIONS ANALYSIS PALM SPRINGS INTERNATIONAL AIRPORT Prepared for: Palm Springs International Airport Prepared by: SH&E, Inc. July 25,2005 TABLE OF CONTENTS 1. INTRODUCTION.........................................................................................................1 CAPITAL VS. OPERATING BUDGETS..............................................1 2. PHASE 1 .....................................................................................................................2 ELEMENT I -CONCESSIONS PLANNING.......................................2 TASKS --........ ..................................................... ................. ........2 ELEMENT 11-LEASE NEGOTIATIONS ............................................5 TASKS ...............................................................................................5 3. PHASE2......................................................................................................I..............6 ELEMENT I-OPERATING PERFORMANCE STANDARDS ............6 TASKS ...............................................................................................7 ELEMENT II -TENANT IMPROVEMENT PROGRAM........................9 TASKS ...............................................................................................9 FEES-......... ............. ........................................ ................ ............10 TIMELINE......................................................................................... 13 4. COMPANY PROFILE............ ............................................... 15 OTHECENTERFORAIRPORTMANAGEMENT, LLC-CONFIDENTIAL SH&E M:1acNEW130Active-from SH&EIPSP Palm Springs\Scope\Palm Springs Scope v4.dcc INTRODUCTION As per our discussions, what follows is a scope of work, with budget, from The Center For Airport Management ("CAM"), which addresses the set of concession issues PSP will encounter over the next two to three years. We have broken the effort into two sequential phases. Each Phase contains one or more major elements. Each Element includes a series of tasks to be accomplished. CAPITAL VS. OPERATING BUDGETS It is normal and customary in airports for many of these Elements to be included in capital budgets rather than operating budgets. For example, most often the planning and financial feasibility elements, and very often the resulting solicitation/negotiation elements for locations in a new terminal are capitalized. Development of property management techniques and products are most often placed in the operating budget. We have identified each individual element in this manner, should you decide to pursue a split capital- operating funding for the total concessionable passenger amenities program development effort. SH&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Pagel of 25 WacNEW130Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc PHASE 1 ELEMENT I—CONCESSIONS PLANNING Element I begins with data collection and familiarization with Palm Springs International Airport ("PSP") with particular focus on customer service and revenue. It begins with a detailed site evaluation and preliminary optimal sizing analysis. As SH&E is already familiar with this airport and CAM has already conducted a preliminary walk-thru, a number of tasks within this element can be conducted quickly and efficiently. The overall objective of any concessions planning effort is to develop a program that will generate the highest "capture" and therefore, airport revenue and customer satisfaction. In order to accomplish this, a thorough understanding of the airport's target terminal-user market segments and each segment's response to the existing motivations presented by the present program is critical. This element reviews and interprets the demographics and lifestyle (psychographics) of each segment of its customer base. This includes terminal traffic flow analysis, a review of any existing survey data and other market research data and a detailed analysis of concession unit performance. The objective is to determine who and where the customer is. TASKS A. EXISTING CONDITIONS ANALYSIS Objective: Determine how passengers and other target segments respond to existing offerings, as a baseline for determining the gap between actual performance and potential capability and projected performance. DATA COLLECTION AND LOCATION IDENTIFICATION ■ Develop airport/tenant information request form. ■ Catalog data and identify alternative resources for data unavailable from primary sources. ■ Review expansion plans to identify redevelopment opportunities. SH&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 2 of 25 WacNEWBIZ Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc ■ Review PSP survey data and other source documentation with regard to demographics, lifestyle, dwell time, meeter-greeters, etc. ■ Existing conditions analysis. — Identify comparables. — Establish benchmark from other airports with similar target market segments, demographics, enplanement (epax) levels. — Analyze per unit historical sales/revenues/transactions by month, type (F&B vs. Retail) and sub-type (e.g. Casual dining vs. bar). ■ Project management, meetings, calls. Product: Informational Request Form, High Level Expansion Ideas (with Updates), Analysis of Survey Data, Site Evaluation and Existing Conditions Review Summary. B. DEMAND ANALYSIS Objective: Determine program size and per unit location and size. GROSS SIZING ANALYSIS ■ Become familiar with PSP's perceptions of and standards for: — Public areas, entry/circulation points. — Food and beverage and retail concession locations, square footage and adjacencies. — Public areas, entry/circulation points. — Facade and display design. — Merchandise or menu assortment and price points. ■ Describe key planning principles. r Identify key design issues. ■ Obtain and analyze target planning year epax projections for two key milestone dates. ■ Analyze epax by carrier, by terminal, and city pairs. Analyze current and historical airline flight schedules, airline and flight load factors, on- board traffic by route, passenger routing information, circulation/congregation patterns by user type. SH&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 3 of 25 M:\acNEWBIZ\Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc ■ Study passenger behavioral motivations. — Identify impact of any survey or similar data on concessions plan. ■ Conduct Demand/Capacity Sizing analyses and Optimal Sizing Gap analysis for the 2 key milestone dates. ■ Develop optimal concession sizing recommendations for airside, landside & back of house for each concession type and sub-type. ■ Project management, trip preparation, meetings, calls. Product. Planning Principles, Sizing Approach, Key Design Issues, Optimal Sizing Confirmation and Analysis, Confirmation and Analysis, Survey Impact Report. C. STORE CONCEPT DETERMINATION Objective: Determine type, sub-type, concepts and adjacencies per location. CONCEPT ANALYSIS ■ Conduct concept alternatives analysis. ■ Identify concessions locations and opportunities to create "neighborhoods" and "outposts" of shops as appropriate. ■ Identify type (food vs. retail) and sub-type (e.g. news vs. specialty retail) per location. ■ Identify concept category per location (e.g. woman's apparel vs. fashion jewelry, etc.). ■ Develop a recommended concept mix and adjacency plan. ■ Create concept depth chart per location. ■ Create brand depth chart per concept (e.g. for casual dining - Pucks, Chili's, local brand, etc.) ■ Make adjustments to above, as requested (up to 2 iterations). r Project management, meetings, trip preparation, calls. Product. Concessions Layout and Concept Plan, Depth Charts SH&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 4 of 25 WacNEWBIZ\Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc TRAVEL Up to a total of 2 person-trips assumed for this element. ELEMENT II—LEASE NEGOTIATIONS Upon the completion of Element I, PSP will have a comprehensive understanding of the additional locations that may exist for tenanting by Anton, Paradies and/or others upon the completion of the terminal remodel. It is assumed that both major agreements will have in the range of three to five years remaining once the remodel is complete and new stores are available for construction. With a remaining term of three to five years, depending upon the required capital investment, the existing concessionaires may likely request an extension or a change to existing terms to offset the debt service incurred for an unexpected mid-term tenant capital investment. Analyses will be conducted to ensure a win-win situation for all parties. TASKS TENANT NEGOTIATIONS Objective: Create the appropriate research and analyses to understand the benefits to each party — PSP and the tenant -- of any proposed changes to business terms or spaces for existing concessionaire. NEGOTIATIONS ANALYSIS ■ Develop projections for proposed units. r Develop detailed operating profit and loss proforma for each proposed unit. ■ Review each existing concessionaires proposals, capital expenditure receipts and similar material. ■ Project existing unit profit/loss. ■ Develop business terms with the objective of creating a set through which an average operator can earn an average profit. ■ Create airport negotiation talking points, including lease amendment preliminary key points language. SH&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 5 of 25 M:1acNEWBIZ\Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc s Advise during negotiations and conduct additional analyses, as requested (20 hours budgeted). ■ Project management, meetings, calls. TRAVEL Up to a total of 2 person-trips assumed for this element. TIME A total of 500 hours is budgeted for Phase I. PHASE 2 ELEMENT I—OPERATING PERFORMANCE STANDARDS This Element develops a full set of detailed and objectively measurable food/beverage and retail concession Operating Performance Standards, the application of which is designed to produce above average customer satisfaction and revenue production. Concession Planning and Solicitation/Selection (or mid-term negotiation in this case) elements are critical to the success of a concession program. But the Property Management element is the element that lasts many times longer than either of the other two, directly impacts the airport's users, affects the customers' perception of the quality of the airport's passenger amenities, and as a by-product, affects the level of revenue generation of the program. A well-managed unit can produce as much as 25% more revenue than a poorly managed unit. As your airport is, in essence, by virtue of its percentage of gross sales rent formula, a joint venture partner of the concessionaire, improving the performance of concessionaires results in incremental revenue to the airport. SH&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 6 of 25 M:1acNEWBIZ\Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc Airport management needs a tool or technique of establishing and communicating clearly articulated and reasonable expected standards of concessionaire operating performance as regards its impact on the airport's customers. As a follow on to that, the airport needs a tool to evaluate operating performance of each individual concession unit according to these standards. Finally, this technique, and the process surrounding it needs to provide an opportunity for a win-win interaction with the concessionaire, with the mutual objective of improving or maintaining performance at the expected levels, so as to enhance revenues for both parties. Invariably we find that the concessionaire general manager has a desire to operate a quality unit and if interacted with appropriately, will work with the airport to achieve this standard. This proposed process supports that objective. This scope outlines the tasks involved in creating and "beta test" implementing a detailed set of as many as 100 measurably objective Operating Performance Standards. While other techniques, such as Mystery Shoppers, may have a role in property management, in the end, a Mystery Shopper's subjective evaluation of, for example, the size of the cashier's smile on a scale of 1 to 5, will not be useful in changing the behavior of a concessionaire who disagrees with the subjective score of the Mystery Shopper. This technique attempts to establish measurable and objective standards of unit operating performance that will result in enhanced customer satisfaction. TASKS A. OPERATING PERFORMANCE STANDARDS Objective: Create and implement measurable and objective Operating Performance Standards grouped into three elements: Premises, Product and Personnel that can be used in partnership with the concessionaires to assure continuous high quality customer service and resultant revenues. SH&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 7 of 25 M:\acNEWBIZWctive-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc ■ Measurable, Objective Standards Development — Interview PSP staff, and discuss key performance standards issues that have arisen in recent history. — Develop draft Operating Performance Standards for Retail and Food-Beverage concessions in three major areas: Premises, Product, and Personnel. Each area will have 3 to 4 sub- sections, with multiple standards developed within each sub- section. The standards will describe the performance expectation for each particular subject, and define varying levels of achievement for each. — Develop Operating Performance Standards Evaluation Forms for Quarterly, Monthly (30-minute) and weekly (5-minute "Quick Check") walk-throughs ("audits"). These forms will be utilized by airport staff and by concessionaire managers as or when they accompany the airport. They will note each area's standard and allow recording of the evaluation score. They will be designed to identify "must pass" items, as well as variable achievement level items. The total concessionaire all-units score will be able to be totaled, and individual issues will be able to be identified. — Conduct a series of Unit Performance Audit "training" evaluations with airport staff. — Participate in initial Performance Audits with up to 2 concessionaire GM's. — Project management, travel preparation, meetings, calls. Product. Operating Performance Standards — Retail, Retail Audit Forms, Operating Performance Standards, Food and Beverage, Food and Beverage Audit Forms B. TRAVEL Up to a total of 1 person-trips assumed for this element. SH&E OTHE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 8 of 25 M:\acNEWBIZActive-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc ELEMENT II-TENANTIMPROVEMENTPROGRAM With new terminal and concourse development and the anticipated new food and beverage and retail units that will be constructed in these areas, PSP will see an increase in the number of required concessions management tasks; particularly during the design, construction and opening periods, There will be lease outline drawings to provide, base building owner shell requirements to complete (a subject of negotiation), a design review process required for tenant improvement work and follow-ups to assure that the construction follows the design and the concept/merchandise mix follows the negotiated agreement for each unit. Each individual space is likely to have at least three design submittals — preliminary, design development and construction documents. TASKS A. EXISTING CONDITIONS Review any existing PSP tenant checklists, guidelines or other documentation related to tenant improvements, design submittal and approval, construction, and maintenance. B. TENANT IMPROVEMENT CHECKLISTS AND PROCESSES PREPARATION Objective: Create a series of detailed "checklists" designed to assist PSP in managing their tenant improvement design, review and approval process and help ensure streamlined and efficient planning and implementation. The checklists will: — Assist in tracking tenant design submittal requirements per PSP's tenant design and procedures standards; — Assist in ensuring that the tenant completes all pre- and post- opening construction requirements prior to and after opening a location. — Assist PSP in thinking through field inspection tasks designed to ensure that the tenant completes all construction related tasks in compliance with PSP's construction procedures. SH&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 9 of 25 M:\acNEWBIZActive-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc — Help to ensure that project plan timelines stay on schedule by identifying each step in the process. Product. Design Submittal Checklists, Design Submittal Tracking Form, Pre- Construction Checklist, Post-Construction Checklist, Pre-Opening Operations Checklists, Construction Field Inspection Checklists, Drawing Submissions Tracking Form, Field Inspection Checklists, Occupancy Guide Matrix, Tenant Design Review Checklist, Unit Development Checklist, Unit Development Checklist Overview, Package Review C. TRAVEL No travel assumed budgeted for this element. D. TIME A total of 215 hours has been budgeted for Phase ll. FEES FIXED FEE FOR SERVICES I The Services scope is proposed as a fixed fee contract to be paid as invoiced, based upon percentage completion of each Element. The fixed fee includes site meetings, prep, de-brief time and out-of-pocket travel-related expenses. "ACTUAL AS INCURRED"FOR EXPENSES Expenses for these 5 person trips are included in the fixed fee services budget, ADDITIONAL REQUESTED TASK ORDER SERVICES For all additional work requested of CAM by the Airport, billings shall be based upon time and materials. The hourly rates are shown on the final page of this scope of services. For such additional Task Order services, CAM will develop budget cap estimates for prior approval by the City Manager,and City Council. This is proposed as a fixed fee contract to be invoiced monthly, based on percentage completion of tasks and elements as agreed to by the Airport. I SH&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 10 of 25 WacNEWBIZ\Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc For any additional tasks outside of this scope and budget, hourly rates are $75 Support, $175 Sr. Analyst, $195 Consultant, $215 Director, $240 Managing Director and $295 Principal. Any such work will await the City's approval of a proposed task order and correlating budget. Other than normal and customary expenses, which will be charged as incurred, there will be no additional or add-on costs to these rates. i The following budget caps (on the next two pages) are proposed for each element: SH&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 11 of 25 M:\acNEWBIZ\Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc PROPOSED BUDGET: Element Budgeted Budgeted Total Hours Fees Budgeted Fees Phase I Element I — Concession Planning Task A — Existing 140 $34,200.00 Conditions Analysis Task B — Demand 110 $22,800.00 Analysis Task C — Store Concept 70 $17,000.00 Definition Total Element 1 3220 $74,000.00 Element 11 — Lease & 180 $44,700.00 Tenant Negotiations Total Element II N $44,700.00 Total Phase 1 Elements 1 500 $118,700.00 & II SH&E OTHE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 12 of 25 WacNEWBIZ Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc Element r mm� Budgeted Budgeted Total Hours Fees Budgeted Fees Phase 2 Element I — Operating 150 $32,000.00 Performance Standards Element II — Tenant 65 $13,900.00 Improvement Management Total Phase 2 215 $45,900 00 Total Phases 1 and 2 715 $164,600.00 TIMELINE Please find the proposed project timeline in the chart below. SH&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 13 of 25 M:\acNEWBIZ\Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc r I - I TASK A- EXISTING CONDITIONS ANALYSIS. TASK B -DEMAND ANALYSIS TASK C -STORE CONCEPT DEFINITION I TASK A- EXISTING CONDITIONS ANALYSIS TASK B -TENANT IMPROVEMENT CHECKLISTS/PROCESSES SH&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 14 of 25 M:\acNEWBIZActive-from SHBE\PSP Palm Springs\Scope\Palm Springs Scope v4.doc COMPANY PROFILE — THE CENTER FOR AIRPORT MANAGEMENT, LLC The Center For Airport Management, LLC (CAM) is widely recognized as the most creative and rigorously analytical concessions planning research center and consultancy firm in the US today. CAM's principal, while an executive at the Port of Portland, developed, in 1987, the first comprehensive contemporary concession program at a US airport: the Oregon Market. CAM conducts concession planning and revenue enhancement programs for airports. Many of the concession principles first developed for this project has become the foundation principles of contemporary concession programs across this nation and internationally. These include the emphasis on creating a dense shopping and eating environment, with carefully planned concept adjacencies, the use of specialty retailers and food service vendors, street pricing, the use of strong local and regional "gateway" branding in tandem with national and international branding, the introduction of qualified off-airport retailers and follow-up property management programs, including Store Doctors", designed to assist retailers make the transition from the off to the on-airport environment. We have a detailed understanding of, and experience in, developing vendor selection processes that will meet public policy, airport policy, customer satisfaction and revenue generation needs. We wrote the ACI handbook on concession contracting, and created and directed the ACl/AMAC seminar on the subject. In the process of carefully studying airport user behavior during management of the Oregon Market, and in subsequent years through research programs at The Center, many analytical principles were first developed here at The Center that advanced the state-of-the-art in understanding airport concessions and airport user requirements. These efforts include the advancement of the importance of the concept of Terminal "dwell" time, passenger segmentation, the sales impact of effective product adjacency, the effect of bringing the passenger into "full-contact" with the merchandise, research in the areas of passenger "gate roam" and a number of other concepts designed to increase the conversion of Terminal users into satisfied purchasers of both concessions and services. CAM is the concession consultant for a great percentage of the major US airports undertaking significant contemporary concession program development. Large Hub clients include Dallas-Fort Worth, Chicago, Miami, JFK-New York, Boston, Minneapolis-St. Paul, Seattle, Houston and Cincinnati. Our Medium Hub experience includes Portland, Norfolk, San Diego, Kansas City, San Jose, Chicago Midway, Jacksonville and others. Each year we take on a project for a small airport, such as Shreveport, Jackson, Mobile and Eugene, in an attempt to further the industry's understanding of how to create low capital investment-high impact concession programs. SET E OTHE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 15 of 25 M:\acNEWBIZ\Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc Company Profile — Contd. The firm offers valuable terminal and facilities planning and design team assistance regarding optimal "public policy versus revenue generating" space allocation. CAM offers expert assistance in the refinement of airport property management systems and procedures in the areas of concession operational and financial performance, tenant development, and marketing programs. CAM's Principal has presented numerous papers at industry conferences in North America and in Europe. He has co-founded and has chaired airport industry trade association committees on concessions and commercial management, and has served multiple terms on association steering committees. He is the author of the ACI handbook on airport contracting procedures. He is past Chairman of the Board of the ACI Associates. We understand this business in great depth and detail and with wide ranging perspective. We understand it from the perspectives of airport user, airport management, concession operator and public policy. All we do is concession consulting. We are the specialists. There is simply no other consulting firm in the United States that focuses its resources so intently on airport concessions. We are excited about the opportunity to assist you achieve your goals. Client Overview CAM has a client list including more than 16 international hubs, 10 medium hubs, 5 small hubs and 5 non-US airports spanning over the past decade. CAM has led the industry in the passenger amenity development principles and has enjoyed unparalleled success in their implementation. As testimony to this success, in every year that there has been airport concession industry awards, CAM clients have placed first or second in every major category, and in some years, both first and second. QT-T ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 16 of 25 �IJJLWacNEWBIZ\Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc Client(Airport) Mall' I Planning Design Solicit Ng,. Pinpety Ckg. Models Assist Mgmt Dv. Intemational Hubs Boston Logan ✓ ✓ ✓ ✓ ✓ ✓ Clucago aHate ✓ ✓ ✓ ✓ ✓ ✓ Cincinnati ✓ ✓ ✓ ✓ ✓ ✓ DtIlas-Ft.Word, ✓ ✓ ✓ ✓ ✓ ✓ Diner ✓ ✓ I-busstonlruer. ✓ ✓ ✓ ✓ ✓ JFK-Tennirrd1 ✓ ✓ ✓ ✓ ✓ ✓ JFK-Te aal4 ✓ ✓ ✓ ✓ ✓ ✓ ,JFK-Temutral5 ✓ ✓ ✓ ✓ JFK-TemnmisSW ✓ ✓ ✓ ✓ ✓ ✓ Dos Angeles ✓ ✓ ✓ ✓ ✓ Maori ✓ ✓ ✓ ✓ ✓ ✓ ✓ Mrineapolis-St.Patti ✓ ✓ ✓ ✓ ✓ ✓ ✓ Seattle-Tacotut ✓ ✓ ✓ ✓ Washington Dtlles ✓ ✓ ✓ ✓ ✓ MeditmtHubs Amborage ✓ ✓ ✓ ✓ ✓ Baltamre/Wasltigoton ✓ ✓ ✓ ✓ Chicago Md=y ✓ ✓ ✓ Ceveland ✓ ✓ ✓ ✓ ✓ ✓ Jaclaonville ✓ ✓ Kansas City ✓ ✓ ✓ Portland ✓ ✓ ✓ ✓ ✓ ✓ ✓ San Diego ✓ ✓ ✓ ✓ ✓ ✓ San`iose Sotdrwst Florida ✓ ✓ ✓ ✓ ✓ ✓ Tatra ✓ ✓ Tucson ✓ ✓ ✓ ✓ ✓ ✓ Washit>,otonl�Iitioud ✓ ✓ ✓ ✓ ✓ Arun Hubs Eugene ✓ ✓ ✓ ✓ ✓ Jadl son ✓ ✓ ✓ ✓ ✓ Nbbihe ✓ ✓ ✓ ✓ ✓ ✓ Sluuveport ✓ ✓ ✓ ✓ ✓ ✓ Non U.S. ObI utg,Vietmm ✓ Montevideo,Uruguay _ ✓ San Jose,Costa Rica ✓ Saraiago,Clale ✓ Seotd,Korea ✓ �H&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 17 of 25 M:\acNEWBIZ\Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc Sheldon Klapper operations and marketing positions at his PRINCIPAL family's restaurant management companies in THE CENTER FOR AIRPORT MANAGEMENT, LLC New York City. SKILLS/EXPERIENCE/PROJECTS He is a founder of The Center For Airport Sheldon Klepper is recognized as a national Management, LLC, a research and consulting leader in airport concession concept planning, firm whose services are exclusively focused on development and management. In his nearly enhancing airport revenues in a manner seven years at the Port of Portland, where he consistent with superior customer service. In functioned as deputy director of their four addition to concession planning and airport system, he was responsible for implementation, CAM programs include a planning, property leasing and management, "Retail Assistance Program"(RAP)sm. and a commercial management, noise and reliever "Store Doctor"sm. program designed to assist system management. In 1987, he created and stores and restaurants succeed in an airport developed the Oregon Market at PDX and with environment. Additional expertise lies in the it, many of the concepts of contemporary area of airport.adjacent property development airport concessions including local themes, and feasibility analysis and cargo marketing nationally recognized branded products, programs. shopping environment design, market basket or street pricing, and internal and external Mr. Klapper has presented numerous papers promotion of airport shopping and restaurant at industry conferences in North America and opportunities. in Europe. He has chaired airport industry trade association committees on concessions Mr. Klapper also developed a number of and commercial management, and has served analysis techniques such as "traffic flow multiple terms on the ACI-NA Economic targeting" and discovered patterns and Steering Committee. He was the director of principles such as "dwell time"and "bounce the industry trade association seminar on- back"which were unknown in the traditional airport Contracting Procedures and is the concession analysis lexicon, but have proven author of the industry handbook on the to be critical to an understanding of how to subject. He is on the Board of ACI-NA and is project and increase revenues, and satisfy past chairman of the Board of ACI Associates. customers. Education Mr. Klapper's first 15 years in the real estate Bachelor of Science, 1969, Marlboro College business began in the construction industry, Master's of Architecture, 1977, MIT where he functioned as a construction supervisor and as an estimator. He then Professional Affiliations received a Master's of Architecture degree from MIT and worked on a number of shoppingAmerican Association of Airport Executives center, commercial and hospitality projects.. Airports Council International—North America He moved to the development field as a National Restaurant Association project manager, market and feasibility International Council of Shopping Centers analyst, and then principal. He has expertise in the field of merchandise and menu assortment plans. Prior to his 28 years' total experience in real estate and retail businesses, he worked in a number of finance, 3H&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 18 of 25 WacNEWBIZ Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc Major Projects Minneapolis-St. Paul International Airport Miami International Airport Master plan concession elements review and revision, management methodology analysis, Development of complete concession plan: master concessionaire-airport mid-term Food and retail concept development, vendor negotiation strategies and tactics, supportive selection, unit sizing, location, merchandise data analysis, trends analysis, and other assortment plans, per unit proformas, revenue revenue related tasks. Concession master projections, feasibility analysis, management plan revisions. Board presentations. methodology analysis, award and selection documents, local and DBE outreach marketing JFK International Air Terminal LLC programs and property management systems. Concessionaire negotiations strategies airline Development of complete concession plan: and elected officials and media presentations. Food and retail concept development, vendor selection, unit sizing, location, merchandise Dallas-Ft. Worth International Airport assortment plans, per unit proformas, revenue projections,feasibility analysis, management Development of complete concession plan: methodology analysis, award and selection Food, beverage and retail concept documents, local and DBE outreach marketing development, sizing, location, menu and programs and property management systems. merchandise assortment plans, per unit Airline and Port Authority presentations. proformas, revenue projections and feasibility analysis, RFQ, RFP and Contract document Chicago O'Hare International Airport development, evaluation/selection/award documents and process, national, regional, O'Hare Airport concession concept plan and small business, and DBE outreach marketing financial projections and performance analysis. programs, management systems and Negotiation strategies, program management methodologies, Board, Advisory Group, and development assistance. Airline and other elected officials and airline presentations. presentations. Midway Airport existing conditions analysis, concept development, With 208 food, beverage and retail units, this is sizing, location, menu assortment plans, per the largest concession planning effort in the unit proformas, revenue projections and airport industry. This project also included the feasibility analysis. development of the first formal airport kiosk program. After a year of testing with up to 30 Terminal One-JFK International Airport test and seasonal kiosks, a permanent program of up to 40 retail and 28 food and Development of complete concession plan: beverage kiosks has been developed Food and retail concept development, unit throughout the four Terminals. The addition of sizing, location, merchandise assortment specialty kiosks is an effective small airport plans, per unit proformas, revenue projections, and mid-term enhancement vehicle. feasibility analysis, management methodology analysis, award and selection documents, local and DBE outreach marketing programs and property management systems. Airline and Port Authority presentations. Cincinnati Northern Kentucky International Airport ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 19 of 25 3H&E M:\acNEWBIZ\Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc Development of detailed operating Development of complete concession plan: performance standards for retail and food Food, beverage and retail concept service. Development of concession plan for development, sizing, location, menu and new 4 million enplanement midfield regional jet merchandise assortment plans, per unit terminal. Development of solicitation process proformas, revenue projections and feasibility for midfield terminal. New entire airport analysis, RFQ, RFP and Kiosk program concession redevelopment plan and development, negotiation strategies and Board solicitation. negotiation strategies and presentations. analyses regarding prime operator contract revisions. Shreveport Regional And Downtown Airports Los Angeles World Airports On/off-airport rental car documents and Duty free and other solicitation and negotiation negotiation strategies, Ground Transportation strategies and analyses. Center concept development. Food and beverage concession management and Boston Logan International Airport development analyses and reports. Rates and charges analyses. General Aviation rules and Concept development, sizing, location, regulations development. Complete merchandise assortment plans, per unit concession planning. Board and user proformas, revenue projections,feasibility presentations. Airport advertising concession analysis, management methodology analysis, concept plan, selection and award process award and selection documents, local and and documentation. Development of DBE outreach marketing programs, advertising RFP and lease documents. management systems, economic impact surveys and analysis, Logan 2000 master Washington DC National & Dulles planning (concession elements). Airport International Airports advertising concession concept plan, selection and award process and documentation. RFP, and Contract document development, Development of advertising RFP and lease evaluation/selection and award documents documents. Board, community groups and and process. elected official presentations. Seattle-Tacoma International Airport Master concessionaire-airport mid-term negotiation strategies and tactics, supportive data analysis, trends analysis, per concept/per unit pro-forma development and comparative analysis, existing conditions analysis, concept planning and other revenue development related tasks. Master Plan concession elements review and revision. Departmental organizational management tasks. Norfolk International Airport 3H&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 20 of 25 M:\acNEWBIZWctive-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc San Jose International Airport New Denver International Airport Concept development, sizing, location, menu New airport concessions concepts, sizing, assortment plans, per unit proformas, revenue location, merchandise assortment and menu projections, feasibility analysis, management plans, revenue projections, and feasibility methodology analysis, RFP, and Contract analysis. Board and airline presentations. document development, evaluation/selection and award documents and process, local and ACI-NA Airport Model Contracting DBE outreach marketing programs, Procedures Seminar management systems. Executive and airline presentations. CAM's President was Seminar Director, chair of the curriculum development steering group, Portland International Airport and moderator of the seminar. He is the editor of the industry Airport Contracting Handbook (As Port of Portland executive responsible for and author of the concession chapters. The planning and property development, and GA seminar and book established the industry reliever system) model for the airport concession and personal services contracting process. At the request of Concept development and creation of the a number of European airports, the seminar Oregon Market Specialty Retail Center. was later conducted in Budapest under the Sizing, location, merchandise assortment aegis of ACI-Europe,where the handbook now plans, per unit proformas, revenue projections, enjoys wide distribution.. feasibility analysis, management methodology analysis, RFP, and Contract document development, evaluation/selection and award documents and process, local and DBE outreach marketing programs. Developed in 1986-87, this was the first US airport specialty retail center. Along with the specialty food program at Washington National's US Air Terminal, this development established the model framework for contemporary airport concessions. Features such as street pricing, brand representation, and the creation of a total shopping environment, and a number of shopper behavior analysis techniques remain the state- of-the-art in the industry. Today it still ranks at the most productive concession development in the country, generating in the range of$7.50 per enplaning passenger. ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 21 of 25 3H&E M:\acNEWBIZWctive-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc Stephen Freibrun MANAGING DIRECTOR THE CENTER FOR AIRPORT MANAGEMENT, LLC S K I L LS/EX P E R I E N C E/PROJECTS Stephen Freibrun has had more than 16 years Freibrun's plans are in place and currently of management and real estate experience in operating at Chicago O'Hare, Midway Airport the public and private sectors, and was as recommended. The results of these plans responsible for seven years for planning, have been increased revenues to the airport managing, leasing and developing retail and and enhanced customer service. food service concessions at Chicago's O'Hare International and Midway Airports, as,part of Mr. Freibrun joined The Center For Airport an on-site concessions consultant Management in 2001. Mr. Freibrun manages management team. CAM's Chicago office, is the Chief Operating Officer of the firm, and at present has client Since 1993 he has been continuously involved project management responsibility for such in assisting airport clients with concessions clients including Miami, Fort Myers, JFK project and property management, and Terminal 8, Cleveland Hopkins, DFW facilities planning. His responsibilities have Terminals A, B, C, E, and included the evaluation, definition, and BaltimoreANashington, among others. Mr. coordination of concessions facility Freibrun's role with clients is a dual one. He is implementation to meet client goals of not only responsible for overseeing all client balancing enhanced customer service and activities for his CAM projects, but is hands on, revenues to the airport. Mr. Freibrun has also often the creator of concessions plans, assisted airlines with establishing programs, financial modeling and feasibility analyses, processes and tools for design review and research analyses, Requests for Proposals construction management. and other reports. During his term at O'Hare and Midway, Mr. He has also worked for Andersen Consulting, Freibrun played a critical, steady role providing now known as Accenture and Mobil Oil continuity for the on-going long-term Corporation. concessions planning of O'Hare and Midway airports. As a contributing author of the Mr. Freibrun has been a guest speaker at ACI original long-range concessions plan for and AAAE conferences throughout his career. O'Hare, the framework for ongoing redevelopment today, and subsequent space program analyses, Mr. Freibrun has developed and maintained construction budgets, sales and revenue projections, demand analyses, merchandising plans and correlating project financing analyses for the concessions business plans at O'Hare and Midway. Mr. SH&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 22 of 25 M.\acNEWBIZWctive-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc Stephen Freibrun Education Baltimore Washington International Airport Bachelor of Arts Degree, Political Science, Management methodology alternatives University of Illinois research and analyses suitable for MAA. Solicitation document preparation. Lease Master's of International Management Degree, development. Development of objective Thunderbird-American Graduate School of evaluation/selection/award documents and International Management. processes. Developer concessions plan review and analysis. Subtenant approval Professional Affiliations processes. Property management systems. Tenant design review. High level MAA American Association of Airport Executives presentations Airports Council International—North America National Restaurant Association Chicago O'Hare International Airport International Council of Shopping Centers American Consultants Council Midway Airport Major Projects O'Hare Airport concession concept plan and financial projections and performance analysis. Boston Logan International Airport Negotiation strategies, program management and development assistance. Airline and other Concept development, sizing, location, presentations. Midway Airport existing merchandise assortment plans, per unit conditions analysis, concept development, proformas, revenue projections, feasibility sizing, location, menu assortment plans, per analysis, management methodology analysis, unit proformas, revenue projections and award and selection documents, local and feasibility analysis. DBE outreach marketing programs, management systems, economic impact Cleveland Hopkins International Airport surveys and analysis, Logan 2000 master planning (concession elements). Airport Situational diagnostics review, concept advertising concession concept plan, selection development, sizing, and location analyses, and award process and documentation. menu and merchandise assortment plan Development of advertising RFP and lease development, per unit proforma development, documents. Board, community groups and and revenue projections and feasibility elected official presentations. analyses. Interim and long term concessions plans. Development and implementation of on-site market analyses and on and off-airport trends analyses. Existing prime operator negotiations and related analyses. 3H&E ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 23 of 25 M:\acNEWB0Active-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc Stephen Freibrun Dallas-Ft. Worth International Airport Terminal 8 -JFK International Airport Development of complete concession plan: Concession plan for the new international Food, beverage and retail concept Terminal. Sized the program, expanded a development, sizing, location, menu and series of preliminary locations, recommended merchandise assortment plans, per unit new spaces and conducted a series of proformas, revenue projections and feasibility financial and logistics feasibility analyses. analysis, RFQ, RFP and Contract document Concessionaire solicitation and development, evaluation/selection/award selection/evaluation program. RFP and lease documents and process, national, regional, development and negotiations, small business, and DBE outreach marketing programs, management systems and Miami International Airport methodologies, Board, Advisory Group, elected officials and airline presentations. Development of complete concession plan: Food and retail concept development, vendor With 208 food, beverage and retail units, this is selection, unit sizing, location, merchandise the largest concession planning effort in the assortment plans, per unit proformas, revenue airport industry. This project also included the projections, feasibility analysis, management development of the first formal airport kiosk methodology analysis, award and selection program. After a year of testing with up to 30 documents, local and DBE outreach marketing test and seasonal kiosks, a permanent programs and property management systems. program of up to 40 retail and 28 food and Concessionaire negotiations strategies. Airline beverage kiosks has been developed and elected officials and media presentations. throughout the four Terminals. The addition of specialty kiosks is an effective small airport Southwest Florida International Airport and mid-term enhancement vehicle. Development of complete concession plan for Terminal 5-JFK International Airport new Ft. Myers Airport located to South of existing facility. Food and retail concept For United Airlines, development of complete development, vendor selection, unit sizing, concession plan and design assistance for the location, merchandise assortment plans, per new international Terminal: Food and retail unit proformas, revenue projections, feasibility concept development, vendor selection, unit analyses, solicitation packaging, RFP and sizing, location, merchandise assortment lease development. Delivery and logistics plans, per unit proformas, revenue projections, design assistance, infrastructure design feasibility analysis, management methodology assistance, design standards, Post 9-11 re- analysis, award and selection documents, planning and tenant improvement process local and DBE outreach marketing programs development. Rental car business term, RFP and property management systems. and lease development. Advertising business term, RFP and lease development. Property management systems. ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 24 of 25 3H&E M:\acNEWBIZWctive-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc Patrick J. Gleason VICE PRESIDENT THE CENTER FOR AIRPORT MANAGEMENT, LLC SKI LLS/EXPERIENCE/PROJECTS Patrick Gleason joined CAM in the Spring of Bachelor of Science Degree, Hotel 2005 after almost 11 years at Dallas/Fort Administration, Cornell University. Worth International Airport. Immediately prior to his departure from DFW, he was the Vice President of Revenue Management with Professional Affiliations responsibility for the majority of the non- American Association of Airport Executives aviation business units. Airports Council International—North America During his tenure at DFW he was responsible National Restaurant Association for the redevelopment of concessions in the International Council of Shopping Centers four existing terminals and creating the largest American Consultants Council tenant direct leasing program and related property management systems in the industry. Major Projects For the last four years he has been involved in Cleveland Hopkins International Airport the design and construction of the new international Terminal D concession and Situational diagnostics review, concept passenger amenity program including a Grand development, sizing, and location analyses, Hyatt Hotel fully integrated into the Terminal. menu and merchandise assortment plan In addition to the in-terminal concession development, per unit proforma development, program, Patrick was also responsible for and revenue projections and feasibility Parking Revenue Management and the Rental analyses. Interim and long term concessions Car Concession. He brings to CAM a wealth plans, of experience in the design and hands-on Development and implementation of on-site implementation of revenue and revenue- market analyses and on and off-airport trends enhancement/improvement programs. analyses. Existing prime operator Prior to DFW Patrick held various senior level negotiations and related analyses. positions in the real estate, restaurant and hospitality industries. Education ©THE CENTER FOR AIRPORT MANAGEMENT, LLC-CONFIDENTIAL Page 25 of 25 SH&E M:\acNEWBIZWctive-from SH&E\PSP Palm Springs\Scope\Palm Springs Scope v4.doc PALM SPRINGS AIRPORT COMMISSION ACTION SUMMARY t MINUTES OF REGULAR MEETING ��., 1 wwwwwxwwwwwwwwwwwwwwwwwxxwxxwwwwwwwwwwxww+-xxxxxxxwwwwwwxxwx+xxwwwxwwwr:wwwwwwww:rwww:ewwwwwwwwxxwwwwwwwwwwww+x+ww WEDNESDAY AIRPORT CONFERENCE ROOM July 6, 2005 8:00 A.M. wwwwxxwwxxxwwxxwwxwwwwwxwxxxxxxxxxxxxwxx:rwxwwwxwwwwwwxwwxwwwwwwwwwwxwwxxxwxwxxwxxwxwwwwwwwxwwwwxxwwxww:rww+.:www Commissioner Ahlstrom stated that came to the United States thirty-five years ago; that he moved to Palm Springs on a permanent basis two years ago; that prior to moving to Palm Springs he had a second home in La Quinta for about twenty years;that he retired as chairman of Volvo the car and truck company which is headquartered in New York City;that in addition to cars and trucks Volvo has two other businesses related to mass transportation: 1) the second largest manufacturer of buses and 2) a major jet engine maintenance facility; that he is very privileged and honored that City Council gave him the opportunity to sit on the Airport Commission. Chairman Elsner asked Airport Commission members to fill out the Airport Commission subcommittee preference form that was handed out and return it to Marjorie Kossler,Administrative Secretary as soon as possible. PRESENTATIONS: NONE ACTION/BUSINESS ITEMS: I. THAT THE PALM SPRINGS INTERNATIONAL AIRPORT COMMISSION RECOMMEND CITY COUNCILAPPROVAL OFAMENDMENTS NO's.2AND NO.3 TO AGREEMENT NO. 4922,AIRPORT MARKETING CONSULTING SERVICES(SH&E)FOR FY 2006 ATA NOT- TO-EXCEED COST OF $125,000 AND$165,000 RESPECTIVELY. Steve Zehr, A. A. E., Assistant Director of Aviation-Operations & Planning provided background information as outlined in the staff report dated July 6, 2005. ACTION: Recommend City Council approval of Amendments No's. 2 and No. 3 to Agreement No.4922,Airport Marketing Consulting Services(SH&E)for FY2006 at a not-to- exceed cost of$125,000 and $165,000 respectively. It was moved by Spicer, seconded by Perry that the Airport Commission approve as recommended and presented. AYES: Ahlstrom, Albert, Buxbaum, Callahan, Duncan, Elsner, Kessler, Packer, Spicer and Villarreal NOES: Betancur and Bizzell ABSENT: Doria and Sherman Commissioner Perry requested a clarification regarding the voting procedure. Page 4 of 12