Title
American Airlines Cargo Transfer Point Land Lease (Ordinance S-53226) - District 8
Description
Request to authorize the City Manager, or his designee, to enter into a land lease with American Airlines, Inc. (American) for the use as a Cargo Transfer Point at Phoenix Sky Harbor International Airport (PHX) for a term of three years with two one-year options to extend the term. The City Treasurer is authorized to accept all payments and revenues for purposes of this ordinance.
Report
Summary
American intends to lease approximately 55,000 square feet of land (Site) located to the east of the West Air Cargo Building A and adjacent to its leased cargo facility. The Site is used for cargo sorting and distribution to its aircraft. The original cargo transfer point land lease was for American's prior location, which was displaced by the Terminal 3 N2 Concourse Project, and it expired on April 30, 2026.
Contract Term
The term of the lease is three years with two one-year options to extend the term at the Aviation Director's sole discretion. The term will commence on or about May 1, 2026. If all options be exercised, the lease will expire on April 30, 2031.
Financial Impact
Annual rent will be approximately $71,500 based on $1.30 per square foot rental rate, plus applicable taxes. Rent will be adjusted annually by three percent or the Consumer Price Index using the Phoenix-Mesa-Scottsdale index, whichever is greater. The total anticipated revenue over the term of the lease will be approximately $379,603.
Location
Phoenix Sky Harbor International Airport, 2485 E. Buckeye Road
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Frank McCune and the Aviation Department.