Title
Jackson Jet Center, LLC Executive Hangar Leases - Amendments (Ordinance S-48607)
Description
Request to authorize the City Manager, or his designee, to execute amendments to Executive Hangar Leases 146544 and 146543 with Jackson Jet Center, LLC, located at Phoenix Sky Harbor International Airport, to extend the terms for five years with three one-year options, for total extensions of up to eight years.
Report
Summary
The purpose of this amendment is to extend the terms of leases for five years with three one-year options, for total extensions of up to eight years, to be exercised at the sole discretion of the Aviation Director.
City of Phoenix and Swift Aviation Services, LLC (Swift) entered into Executive Hangar Leases 146544 and 146543 for Executive Hangars 24 and 29, respectively. On Jan. 26, 2022, Jackson Jet Center (Jackson) purchased Swift at Phoenix Sky Harbor International Airport (PHX). Executive Hangar Leases 146544 and 146543 terms allowed the leases to be assigned and assumed with written approval from the Aviation Director. On Jan. 11, 2022, PHX executed a Consent to Assignment agreement for both hangars. Both Leases terminate on Dec. 31, 2022. The hangars are used for the storage and allowed maintenance of Jackson’s approved aircraft and for no other use or purpose without the consent of the Aviation Director.
Contract Term
These amendments will extend the end dates of the leases from Dec. 31, 2022 to Dec. 31, 2027, plus three additional one-year options to extend, to be exercised at the sole discretion of the Aviation Director.
Financial Impact
Current rent for each lease is approximately $33,969 per year ($2,830 monthly), and $67,938 combined ($5,661 monthly). Combined total rent over the term of the leases will be approximately $543,504, if all options are executed. Rent will continue to be adjusted annually based on the Phoenix-Mesa-Scottsdale Consumer Price Index (CPI) or three percent, whichever is greater.
Concurrence/Previous Council Action
The City Council approved Executive Hangar Leases 146544 and 146543 (Ordinance S-43539) on May 31, 2017.
The Phoenix Aviation Advisory Board recommended this item for approval on March 17, 2022, by a vote of 9-0.
Location
Phoenix Sky Harbor International Airport - 3701 and 3711 E. Air Lane
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.