The Los Angeles City Council has approved an Amended and Restated Terminal Facilities Lease and License Agreement between Los Angeles World Airports and Delta Air Lines for space in Terminal 5 at Los Angeles International (LAX).
The lease, approved Friday, restates the original 40-year term expiring in 2025; includes terminal maintenance and operations charges agreed upon in a 2008 settlement between LAWA and the airline; and covers acquisition of $192M of terminal renovations under way and expected to be completed over the next several years.
According to the lease, Delta will complete its current $228,826,085 terminal renovation, LAWA will acquire $192,002,441 for construction of non-airline proprietary elements and the Transportation Security Administration will reimburse $25M through LAWA for an inline checked-baggage-screening system. The airline will cover nearly $12M for renovations to its proprietary areas, including the club lounge and boarding gates. No money from the Los Angeles City’s general funds 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,” says LAWA Executive Director Gina Marie Lindsey.
The lease is expected to bring in approximately $19,640,000 in revenue to LAWA during the first year, and approximately $283,190,000 over the 14 years remaining in the original term.
The airline has already finished several components, including the construction of the inline baggage-screening system, replacement of the outbound baggage system, renovation of the U.S. Customs & Border Protection’s federal inspection facility and TSA’s passenger security screening checkpoints, and the creation of 800 sq. ft. of additional space by filling the existing rotunda area under the Delta Air Lines Sky Club. In addition, as part of the lease, Delta will renovate the ticketing/check-in lobby, baggage-claim areas, boarding gates and other parts of the passenger security screening checkpoints; it will also replace 13 passenger boarding bridges and add specialty lighting, finishes and other architectural elements to improve the passenger experience.
Construction began last year and is slated to be finished within five years.
