Title
Amend Facility Lease Agreement 164739 with AGI Ground, Inc., at Phoenix Sky Harbor International Airport (Ordinance S-53037) - District 8
Description
Request to authorize the City Manager, or his designee, to amend Facility Lease Agreement 164739 (Lease) with AGI Ground, Inc. (AGI) to add approximately 1,920 square feet of cargo space in Building B of the West Air Cargo complex at Phoenix Sky Harbor International Airport (PHX). Further request authorization for the Aviation Director to make future additions, subtractions, and changes to the AGI's cargo leased space not to exceed a total of 11,520 square feet as the Aviation Director deems necessary or appropriate to attain the highest and best use of Aviation Department resources, as well as to accommodate future AGI cargo-handling business needs for the duration of the Lease.
Report
Summary
AGI currently leases approximately 5,760 square feet of cargo space in Building A of the West Air Cargo complex to provide cargo handling services to Alaska, Delta, and Hawaiian Airlines. AGI recently secured an additional contract with United Airlines that requires more space to provide adequate cargo-handling services to United. This amendment would bring AGI's total cargo leased space to approximately 7,680 square feet.
Contract Term
The amendment does not change the term of Lease. The Lease commenced February 2, 2026, and has a term of three years with three one-year options to extend the term at the sole discretion of the Aviation Director.
Financial Impact
AGI will pay the rental rate per square foot per year for the West Air Cargo facilities according to the Airport Rates and Charges program under Phoenix City Code section 4-173(B). For the first year, additional rent for the 1,920 square feet space will be approximately $34,560. The cargo facilities rental rate will be adjusted annually according to the Airport Rates and Charges provision of Article IX, Chapter 4, of the Phoenix City Code.
Location
2485 E. Buckeye Road
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Frank McCune and the Aviation Department.