Title
New Ground Lease with The Galloway Group, Inc. at Phoenix Sky Harbor International Airport (Ordinance S-52715) - District 8
Description
Request to authorize the City Manager, or the City Manager's designee, to enter into a ground lease with The Galloway Group, Inc. (Galloway) at Phoenix Sky Harbor International Airport for three years with two one-year options to extend the term.
Report
Summary
Galloway requests to enter into a ground lease for four contiguous Aviation-managed properties located at 3218 E. Madison Street and 117 S. 32nd Street for a term of three years, with two one-year options to extend the term. The combined aggregate area of the premises totals approximately 25,743 square feet of vacant land. The properties are located across the street from Galloway's existing location at 104 and 110 S. 32nd streets. Galloway's current site is insufficient to accommodate the storage of the company's equipment and materials. Galloway intends to use the premises for outdoor storage of fiber rolls, trailers, and related items.
Contract Term
The ground lease term will be three years, which will commence on May 14, 2026, and expire on May 13, 2029. The ground lease will include two one-year options to extend the term at the sole discretion of the Aviation Director.
Financial Impact
Rent for the first year of the ground lease will be approximately $36,040 based on a rental rate of $1.40 per square foot. Rent will be adjusted annually based on the Phoenix-Mesa-Scottsdale Consumer Price Index or three percent, whichever is greater. Total anticipated revenue over the term of the ground lease will be approximately $180,201 if all options to extend the term are exercised.
Concurrence/Previous Council Action
The Phoenix Aviation Advisory Board Business and Development Subcommittee recommended approval of this item on February 5, 2026, by a vote of 3-0.
The Phoenix Aviation Advisory Board recommended approval of the item on February 19, 2026, by a vote of 8-0.
Location
3218 E. Madison and 117 S. 32nd streets.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Frank McCune and the Aviation Department.