Title
Empire Airlines, Inc. Executive Hangar Lease - Amendment (Ordinance S-48606)
Description
Request to authorize the City Manager, or his designee, to execute an amendment to Executive Hangar Lease 147168 with Empire Airlines, Inc. located at Phoenix Sky Harbor International Airport to extend the term for five years with three one-year options, for a total extension of up to eight years.
Report
Summary
The purpose of this amendment is to extend the term of the lease for five years with three one-year options, for a total extension of up to eight years, to be exercised at the sole discretion of the Aviation Director.
Empire Airlines, Inc. (Empire) entered into Executive Hangar Lease 147168 on July 1, 2014 for Executive Hangar 25. The Lease is scheduled to terminate on Dec. 31, 2022. Empire is requesting to extend the term of the lease for five years with three one-year options, for a total extension of up to eight years. The hangar is used for the storage and allowed maintenance of Empire’s approved aircraft and for no other use or purpose without the consent of the Aviation Director.
Contract Term
This amendment will extend the date of the lease from Dec. 31, 2022 to Dec. 31, 2027, plus three additional one-year options to extend, to be exercised at the sole discretion of the Aviation Director.
Financial Impact
Current rent is approximately $37,830 per year ($3,152 monthly). Total rent over the extended term of the lease will be approximately $302,640. Rent will continue to be adjusted annually based on the Phoenix-Mesa-Scottsdale Consumer Price Index (CPI) or three percent, whichever is greater.
Concurrence/Previous Council Action
The City Council approved:
- Executive Hangar Lease 147168 (Ordinance S-40620) on March 19, 2014; and
- Executive Hangar Lease 147168 - Amendment (Ordinance S-45612) on May 1, 2019.
The Phoenix Aviation Advisory Board recommended this item for approval on March 17, 2022, by a vote of 9-0.
Location
Phoenix Sky Harbor International Airport - 3703 E. Air Lane
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.