Title
Ground Lease with Cutter Aviation Phoenix, Inc at 2805 E. Old Tower Road (Ordinance S-49430)
Description
Request to authorize the City Manager, or his designee, to execute a Ground Lease with Cutter Aviation Phoenix, Inc. for 46,200 square feet of Aviation-owned land located at 2805 E. Old Tower Road at Phoenix Sky Harbor International Airport. Further request that City Treasurer to accept all funds related to this item.
Report
Summary
Cutter Aviation Phoenix, Inc. is requesting to lease approximately 46,200 square feet of vacant land at Phoenix Sky Harbor International Airport for the purpose of improving the vacant lot into an improved parking lot conforming to City of Phoenix standards. The parking lot will be used for employee and guest parking in support of Cutter Aviation's on airport Fixed Based Operator business which adjoins the parcel.
Contract Term
The lease term for this Ground Lease is five years with no extension options.
Financial Impact
Annual revenue will be approximately $48,510.00. Rent will be adjusted annually beginning in lease year four by three percent. Rent credits will be provided in the amount of $145,500, to be applied in equal monthly amounts over the term of the agreement. The rent adjustment of three percent will be applied to the full rent amount, not the net rent amount after the rent credits are applied. Total net revenue generated over the lease term is approximately $105,876.
Concurrence/Previous Council Action
The Business Development Subcommittee recommended approval of the item on Jan. 5, 2023 by a vote of 8-0.
The Phoenix Aviation Advisory Board recommended City Council approval of this item on Jan. 19, 2023 by a vote of 7-0.
Location
2805 E. Old Tower Road
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.