Hong Kong based Duty Free Shopping inks lease
deal with San Francisco Board of Supervisors
By Emmett Berg, Bay City News Service
SAN FRANCISCO INTERNATIONAL AIRPORT (BCN) - The firm behind
duty-free shopping and other services at SFO's International Terminal
inked a deal with the San Francisco Board of Supervisors yesterday
that will increase rent and bring in new stores.
Hong Kong-based DFS, L.P., will pay $26.4 million yearly to San
Francisco for the continued right to be the general concessionaire
at the international terminal. With finalization of the deal,
DFS would gain the right to offer floor space for a new Coach
luxury items store, as well as a new bookstore and two kiosks.
Since 9/11, yearly rent paid to the city under the predecessor
arrangement was lowered because of reduced passenger traffic after
the terrorist attacks on New York and Washington.
In the years following, DFS's rent was gauged to a percentage
of the yearly revenue generated on site, with a maximum of $26.1
million per year. With passenger traffic returning to previous
levels, city negotiators sought a $300,000 increase and minimum
guaranteed rent payments instead of payments partially determined
by sales revenue.
DFS, which runs some corporate functions from San Francisco offices,
now runs five duty-free stores in the terminal and 24 duty-paid
stores. With extensions, the lease could last until 2017. Upon
finalization the new terms would take effect no later than June
The lease extension also refers to construction of a passageway
allowing domestic passengers at SFO to enter the international
terminal, and vice-versa, without additional security processing.
Copyright © 2006 by Bay City News, Inc. -- Republication,
Rebroadcast or any other Reuse without the express written consent
of Bay City News, Inc. is prohibited.