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A.B. Won Pat International Airport Authority, Guam

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Airport Duty Free Transition Starts

Sunday, July 14, 2013

The A.B. Won Pat International Airport Authority (“Airport”) announced that the transition of the Airport Specialty Retail Merchandise Concession (the “Concession”) from DFS Guam L.P. to Lotte Duty Free Guam, LLC commenced this past Saturday, July 13, including DFS’s return of a portion of the Concession premises now occupied by Lotte. The transition will continue pursuant to a mutually agreed upon plan which has Lotte possessing all of the Concession premises by 12:01 am on July 21.

According to Airport Executive Manager Chuck Ada the transition is a complicated process which involves detailed coordination with Airport Police and the Transportation Security Administration officials so as to ensure compliance with both federal and local security regulations and to ensure that the security and safety of the traveling public is not in any way compromised. Ada said that he wanted to thank DFS and Lotte for meeting and working with the Airport in coming up with a sensible transition plan.

Executive Manager Ada stated, “The Airport is very excited and anxious to start this process as the new Concession agreement with Lotte is a key component of the Airport’s financial and capital improvement plan.” Ada further stated that, “In addition to the $23 million of improvements Lotte has agreed to make, the increased guaranteed rental of more than three times (3x) the rate under the old concession agreement is integral to the refinancing of the Airport’s existing $145 million bond obligation. Approximately $110 million of new money proceeds are to fund security, safety, replacement and upgraded passenger convenience capital projects. Improvements to the concession space will include upgrades to the restrooms within the concourse level, a refurbished food court and smoking lounge, and a new kids’ play area.

Over the next several months there will be substantial construction activity in the Airport. Ada asked for the public’s understanding and stated, “The Airport will do its best to minimize any inconvenience this Concession transition and new construction may cause.” Ada went on to say, “These are major projects critical to the Airport, the Island and the region. With the new Concession agreement the Airport will have first class facilities allowing us to optimize revenue opportunities and undertake much needed and long awaited capital improvement projects. The improvements are for the benefit of our island community and our visitors, so I’m confident the public will be cooperative with us during the construction over the next several months.”
In regard to the pending protests, lawsuit and petition to debar DFS, Ada commented that those matters are being dealt with by the lawyers for the parties and will be resolved in the ordinary course. In the meantime, the Airport is moving forward to carrying out critical Airport projects.