Title
Restoration of Tenant Fire Suppression System at Phoenix Goodyear Airport (Ordinance S-53254) - Out of City
Description
Request to authorize the City Manager, or his designee, to execute amendments to Unsubordinated Ground Lease Agreement No. 138997-0 with DBRT Goodyear FBO, LLC, dba Lux Air (Lux Air Lease); and Facility Lease Agreement No. 136123 and Lease Agreement No. 75812 with AerSale, Inc. (collectively, AerSale Leases). These amendments to the Lux Air Lease and the AerSale Leases will enable Lux Air and AerSale (Tenants) to purchase and install the equipment necessary to restore the fire suppression system owned by the Aviation Department at Phoenix Goodyear Airport (GYR) and to be reimbursed for those expenses. Further, request to authorize the City Manager, or his designee, to reimburse the Tenants through rent credits for the asset purchase and fire watch expenses incurred by the Tenants.
Report
Summary
On August 25, 2026, a fire occurred at the pump house at GYR that supports the fire suppression system for the Tenants. The pump house is on City-owned property. Tenants have provided maintenance to the system because its primary purpose is to support the required life safety regulations necessary for the Tenants' business operations. The fire damaged the pump equipment and rendered the fire suppression system inoperable. Under the City of Goodyear's fire code, a fire watch was immediately required of the Tenants to continue limited operations. Some critical business operations of AerSale, such as aircraft painting and welding activities for repairs, cannot occur until the system is restored.
The Tenants have procured a restoration solution that is acceptable to the Aviation Department and the City of Goodyear Fire Marshall that entails the purchase of a pump to produce an acceptable flow rate for the system. Due to the urgency to restore full Tenant operations, the Tenants purchased the pump and completed its installation as well as required flow tests during the week of September 19, 2026. The City of Goodyear Fire Marshal approved the new pump for use and allowed the Tenants to conclude required fire watches. While the Aviation Department provided consultation to the Tenants on the approach for the pump restoration, it conveyed to the Tenants that any reimbursement of the expenses to purchase and install the new pump were subject to City Council authorization to amend the Tenants' leases. AerSale will be responsible for maintenance of the new pump and AerSale Leases will include a required maintenance schedule with reporting to the Aviation Department on a recurring basis to ensure appropriate maintenance of the system.
Financial Impact
The rent credit will not exceed $400,000. The actual amount of the rent credit will depend on verifiable costs presented to the Aviation Department. The full amount of the pump purchase and installation expenses will be eligible for a rent credit. Fifty percent of fire watch expenses will also be eligible for a rent credit. City-verified expenses will be applied to the monthly rent for the Tenants in an amount not to exceed 50 percent of the Tenants' monthly rent until the amount of the rent credit is exhausted.
Concurrence/Previous Council Action
City Council originally approved the DBRT Goodyear FBO, LLC, dba Lux Air, Unsubordinated Ground Lease Agreement No. 138997-0 on March 19, 2014 (Ordinance S-40623). The Aviation Department is preparing a new amended and restated lease agreement for AerSale, the terms of which were adopted by the City Council on June 14, 2023 (Ordinance S-49837) and amended by the City Council on June 3, 2026 (Ordinance S-52950).
Location
Phoenix Goodyear Airport, 1658 S. Litchfield Road, Goodyear, AZ.
Council District: Out of City
Department
Responsible Department
This item is submitted by Deputy City Manager Frank McCune and the Aviation Department.