Title
Papa Sierra, LLC Executive Hangar Leases - Amendments (Ordinance S-48608)
Description
Request to authorize the City Manager, or his designee, to execute an amendment to Executive Hangar Leases 139057 and 151621 with Papa Sierra, LLC, located at Phoenix Sky Harbor International Airport to extend the terms for five years with three one-year options, for total extensions of up to eight years.
Report
Summary
The purpose of these amendments is to extend the terms of the leases 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.
Papa Sierra, LLC (Papa Sierra) entered into Executive Hangar Lease 139057 on July 1, 2014 at Phoenix Sky Harbor International Airport for Executive Hangar 28. Additionally, Papa Sierra entered into Executive Hangar Lease 151621 on Feb. 1, 2020 for Executive Hangar 27. Both Leases are scheduled to terminate on Dec. 31, 2022. Papa Sierra is requesting to extend the term for both leases. The hangars are used for the storage and allowed maintenance of Papa Sierra’s approved aircraft and for no other use or purpose without the consent of the Aviation Director.
Contract Term
These amendments will extend the end date of the lease terms 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 for lease 139057 is approximately $37,830 per year ($3,152 monthly). Current rent for lease 151621 is approximately $37,763 per year ($3,147 monthly). Total rent over the extended term for both leases will be approximately $604,744. Rent will continue to be adjusted annually based on the Phoenix-Mesa-Scottsdale Consumer Price Index or three percent, whichever is greater.
Concurrence/Previous Council Action
The City Council approved:
- Executive Hangar Lease139057 (Ordinance S-40620) on March 19, 2014;
- Executive Hangar Lease 139057 - Amendment (Ordinance S-45613) on May 1, 2019; and
- Executive Hangar Lease 151621 (Ordinance S-46176) on Nov. 20, 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 - 3707 and 3709 E. Air Lane
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.