Title
Deer Valley Airport - DVT Aviation Park, LLC - Ground Lease (Ordinance S-44059)
Description
Request to authorize the City Manager, or his designee, to enter into a new 30-year ground lease (Lease) with DVT Aviation Park, LLC (DVTAP) at Deer Valley Airport.
Report
Summary
DVTAP will invest approximately $11 million to construct five corporate aircraft storage hangars consisting of approximately 70,000 square feet of hangar and office space. The leasehold premises will be approximately 217,800 square feet following completion of the hangar improvements by DVTAP. As-built drawings will be received, and a legal survey will be completed. In the event the square footage is reduced, the rent will be adjusted to reflect the change, and DVTAP will be credited from the rent commencement date for the difference. In the event the square footage increases, DVTAP will pay to the City the difference from the rent commencement date.
Contract Term
The lease term will be for 30 years with no options to extend. If the premises are needed for airport expansion purposes, the City will provide Lessee at least 12 months' prior written notice to terminate the Lease and will buy out the initial unamortized investment.
Financial Impact
The ground rental rate will be $0.54 per square foot per year, plus applicable tax, adjusted annually by the Consumer Price Index (CPI) for Phoenix-Mesa. Rent will commence 18 months after the lease effective date or upon beneficial occupancy of the improvements, whichever occurs first.
Concurrence/Previous Council Action
This item was recommended for approval by the Downtown, Aviation, Economy and Innovation Subcommittee on Nov. 1, 2017, by a vote of 3-0.
Location
Phoenix Deer Valley Airport is located at 702 W. Deer Valley Road.
Council District: 1
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Aviation Department.