Title
Amendment to Lease with Aersale, Inc. at Phoenix Goodyear Airport (Ordinance S-46173)
Description
Request to authorize the City Manager, or his designee, to amend Facility Lease Agreement No. 136123 (Lease) with AerSale, Inc. (AerSale) for Hangar 18 located at Phoenix Goodyear Airport (GYR) to extend the Lease term approximately six years.
Report
Summary
In 2017, AerSale assumed the Lease from its predecessor, AeroTurbine, Inc. Aersale uses Hangar 18 to perform aircraft maintenance. The Lease covers 89,306 square feet of hangar floor space, 12,398 square feet of office/shop space, and 167,776 square feet of surrounding apron space. The Lease will expire on May 16, 2020. AerSale has requested to continue leasing Hangar 18 for an additional six years.
Contract Term
The term will be extended approximately six years to June 27, 2026, which will be coterminous with AerSale’s Lease Agreement No. 75812 for Hangar 52 at GYR.
Financial Impact
Annual rent will be approximately $349,053 per year with no annual adjustments. The total anticipated revenue over the term of the Lease will be approximately $2,094,318. In exchange for the Aviation Department’s agreement to forego annual rent increases, AerSale agrees to assume maintenance and custodial responsibilities for Hangar 18, which is estimated to save GYR approximately $480,000 over the term of the Lease.
Concurrence/Previous Council Action
This item was recommended for approval by the Phoenix Aviation Advisory Board on Oct. 17, 2019 by a vote of 7-0.
Location
Phoenix Goodyear Airport, 1658 South Litchfield Road, Goodyear, Ariz.
Council District(s): Out of City
Department
Responsible Department
This item is submitted by Assistant City Manager Deanna Jonovich and the Aviation Department.