Title
Corporate Aircraft Storage Hangar Lease with Salt River Project Agricultural Improvement and Power District (Ordinance S-44324)
Description
Request to authorize the City Manager, or his designee, to enter into a corporate aircraft storage hangar lease with Salt River Project Agricultural Improvement and Power District (SRP) for a hangar located at 2601 E. Air Lane at Phoenix Sky Harbor International Airport. Anticipated revenue to the Aviation Department is $858,756 over the seven-year term, if all options are exercised.
Report
Summary
SRP currently leases a corporate aircraft storage hangar, comprised of approximately 14,484 square feet, located at 2601 E. Air Lane. The hangar lease (Ordinance S-37661) will expire on April 30, 2018, and SRP desires to continue to lease the hangar. The lease may contain other terms and conditions deemed necessary or appropriate by the Aviation Director or his designee.
Contract Term
The term of the lease will be two years, with five one-year options to extend the term, which may be exercised at the sole discretion of the Aviation Director. The City may terminate the lease if the leased premises are needed for airport expansion purposes.
Financial Impact
The initial rental rate will be $8.47 per square foot per year, plus applicable taxes. The rental rate will be adjusted annually according to the Consumer Price Index throughout the term of the lease. Anticipated revenue to the Aviation Department is $858,756 over the seven-year term, if all options are exercised.
Concurrence/Previous Council Action
Ordinance S-37661 was adopted by City Council on Feb. 23, 2011.
Location
2601 E. Air Lane
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Aviation Department.