Title
Avis Budget Car Rental, LLC New Ground Lease (Ordinance S-50561)
Description
Request to authorize the City Manager, or his designee, to enter into a new Ground Lease with Avis Budget Car Rental, LLC (Avis) for approximately three acres at Phoenix Sky Harbor International Airport (PHX).
Report
Summary
Avis operates a rental car concession at the Rental Car Center (RCC) at PHX. Avis is requesting to lease approximately three acres in the East Tonto Lot (Lot) at PHX for storage of excess rental cars related to their business operations at the RCC. The Aviation Department has identified the Lot as a location that may be displaced to accommodate future airport growth and development. To accommodate redevelopment of the Lot, staff requests to establish the lease term expiration date of April 5, 2027 to be coterminous on the same contract expiration date as other leases in the Lot, and include two one-year options to extend at the sole discretion of the Aviation Director.
Contract Term
The ground lease term will be three years and will commence on April 6, 2024, and terminate on April 5, 2027. Provisions of the ground lease will include two one-year options to extend which may be exercised at the sole discretion of the Aviation Director.
Financial Impact
Rent for the first year of the Ground Lease will be approximately $137,214 and will be adjusted annually based on the Phoenix-Mesa-Scottsdale Consumer Price Index or three percent, whichever is greater. Total anticipated revenue, if all options are exercised, will be approximately $686,070.
Concurrence/Previous Council Action
The Phoenix Aviation Advisory Board, Business and Development Subcommittee recommended approval of the item on Jan. 4, 2024 by a vote of 3-0.
The Phoenix Aviation Advisory Board recommended approval of the item on Jan. 18, 2024 by a vote of 6-0.
Location
Phoenix Sky Harbor International Airport, 2485 E. Buckeye Road
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.