San Francisco Mayor London Breed has signed an ordinance authorizing San Francisco International Airport (SFO) to launch a rent relief program for airport concession tenants, in which lease agreements will be modified to waive certain rent and fees.
The value of the relief available under the COVID-19 Emergency Rent Relief Program is estimated at $21.3 million and will be supported through federal CARES Act funding. SFO joins the San Francisco Port, San Francisco Municipal Transportation Agency, and the Recreation and Park Department in providing relief for commercial tenants impacted by COVID-19.
“Our entire SFO business community is critical to delivering the travel experience our passengers expect and deserve,” said Ivar Satero, SFO director. “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.”
SFO concession tenants pay the greater of a minimum annual guarantee (MAG) or a percentage of gross receipts (concession fee) along with other cleaning and infrastructure fees, with each lease containing a provision for suspending the MAG if passenger traffic declines severely for three consecutive months. Under this provision, MAGs were suspended effective June 1, 2020 and will resume after enplanements have recovered for two months.
Under the COVID-19 Emergency Rent Relief Program, the MAG will be waived for SFO concessions for the months of March, April and May 2020. In addition, all fees will be waived for April and May 2020, and all cleaning and infrastructure fees will be waived from June through December 2020.
Rental car tenants, whose lease structure differs slightly, will have space rent waived for March, April and May 2020, and utilities fee waived for April and May 2020.