Rent Relief Approved for Airport Businesses

Los Angeles airport commissioners Tuesday night unanimously granted nearly $9.5 million in rent relief to operators of concessions at Los Angeles and Ontario international airports hard hit by the decline in air travel after the Sept. 11 terrorist attacks.

Representatives of the concessionaires endorsed the rent relief package but said the assistance will not be enough unless air travel rebounds soon.

Commission President Ted Stein cautioned them not to expect additional assistance beyond the end of this year.

“We can only grant a certain amount of relief,” he said.

The commission, which met in Van Nuys, was expected to postpone action on a controversial proposal to sharply increase the cost of parking at Los Angeles and Ontario airports and at the popular FlyAway park-and-ride lot in Van Nuys.

The proposal would boost the price of parking in the central terminal area at LAX from $24 to $35 a day, making it one of the most expensive airports at which to park in the nation. The rate had been $16 a day until October 2000.

Officials recommended the latest parking rate increase in an effort to close a huge deficit in the budget of Los Angeles World Airports, the city agency that runs LAX, Ontario, Van Nuys and Palmdale airports.

Revenues from parking lots, concessions, rental car companies and airlines have fallen since the East Coast terror attacks scared away air travelers. Adding to the airport’s financial woes are higher security costs required after the Federal Aviation Administration ordered closer scrutiny of passengers and carry-on baggage.

LAX lost about $35.9 million because of lower revenue and added security expenses from Sept. 11 to Oct. 31. The budget deficit is expected to reach $108 million by the end of June unless passenger traffic returns to normal.

Operators of the airport’s concessions--duty-free shops, newsstands, retail outlets, bars and restaurants--told the commission that they have seen a steep decline in business because fewer people are flying and the FAA allows only ticketed passengers beyond security checkpoints.

Except in the Tom Bradley International Terminal, virtually all of the airport’s concessions are past the security checkpoints, off-limits to those dropping off or picking up passengers.

Since the terrorist attacks, concessionaires have pressured Mayor James K. Hahn, the City Council and the Airport Commission for a reduction in their monthly rent for space at the airport.

But faced with the airport’s own financial difficulties, LAX officials have been reluctant to grant such assistance. The Hahn administration switched course and agreed to a relief package after the issue threatened to boil over at a City Council meeting Friday.

The package allows concessionaires to skip their monthly minimum payments from Oct. 1 through Dec. 31. Instead their rent will be determined by a percentage of their sales. No rent would be charged for the period from Sept. 11 to Sept. 15 when air traffic was shut down in the United States.

Labor union representatives complained to commissioners that some concessionaires have failed to follow terms of contracts that were negotiated after often bitter campaigns to organize employees. The unions demanded that the airport deny any rent relief to concessionaires who refuse to abide by their contracts.

Tom Walsh, president of the Hotel and Restaurant Employees Union, said a third of the union local’s membership at LAX has been laid off since Sept. 11. He called for extending the rent relief beyond the end of this year.