HAGÅTÑA (The Guam Daily Post) — The Guam International Airport Authority’s board of directors voted to extend Lotte Duty Free’s concession agreement for another three years.
Thursday was supposed to mark the end of a 10-year concession agreement between GIAA and the luxury vendor.
However, on Tuesday the board voted to approve the three-year contract extension following the passage of Public Law 37-23, which essentially authorized the airport to extend the agreement with Lotte.
Prior to voting, GIAA Deputy Executive Manager Ricky Hernandez said the extension was needed considering the uncertainty of the speed of recovery to pre-pandemic levels.
“As an example, the projected level of employment enplanements for fiscal year 2023 is at approximately 50% of pre-pandemic levels in fiscal year 2019,” Hernandez said, explaining the extension will begin July 21 and end July 20, 2026.
Hernandez said the contract gives Lotte a fixed fee for rent at $2.64 million, paid in advance of the contract period. Other terms included paying a per in-plane passenger fee of $4 for the first 1 million in-plane passengers, $4.50 each for 1 million and one to 1.5 million in-plane passengers, and $5 for more than 1.5 million in-plane passengers for the duration of the contract, Hernandez said.
“All other terms and conditions of the agreement remain unchanged,” Hernandez added.
After the board approved the contract without any discussions or questions, Vice Chairperson Gurvinder “Bic” Sobti said he was happy the airport can now move forward.
“Guam was suffering the last three, four years … and I’m glad we came to this finish and then moving forward for the next three years with a good relationship with Lotte. … Best of luck to the airport and Lotte,” said Sobti, who ran the meeting with Chairperson Brian Bamba absent.
Lawsuit
One of the reasons for the passage of Public Law 37-23 was GIAA’s ongoing lawsuit with former airport luxury concessionaire DFS, which alleged misconduct after Lotte was awarded the contract in 2012.
The ongoing lawsuit has led to challenges “to putting out new solicitations for concession-related services,” Hernandez said at a public hearing last month for Bill 130-37, which became Public Law 37-23.
At the board meeting, an agenda item was designated to have directors go into executive session to discuss the ongoing litigation.
Following the executive session, which wasn’t open to the public, directors returned to approve a resolution to authorize the law firm of Calvo, Fisher & Jacob to represent current and former GIAA employees and directors in the DFS lawsuit.
Guam International Airport Authority board of directors Vice Chairperson Gurvinder “Bic” Sobti, center, convenes a special meeting in the GIAA conference room Tuesday, July 18, 2023.
