Title
Billboard Concession Lease Agreement at Phoenix Sky Harbor International Airport (Ordinance S-47569)
Description
Request to authorize the City Manager, or his designee, to enter into a Billboard Concession Lease Agreement with Becker Boards Small, LLC at Phoenix Sky Harbor International Airport for 10 years with one 10-year renewal option.
Report
Summary
There are currently five revenue generating billboards located on Aviation Department property, including two static billboards located along Interstate 10 and three others at various locations. The two existing static billboard contracts along Interstate 10 have expired and have been operating month-to-month. In an effort to procure new revenue sources, the Aviation Department has identified underutilized, non-aeronautical land along State Route 143 that is suitable for the installation of three new billboards.
On Sept. 16, 2020, the Phoenix City Council authorized the Aviation Department to issue a Revenue Contract Solicitation for the upgrading of two existing static billboards along Interstate 10 to digital billboards (Package 1), and the installation of three new digital billboards along State Route 143 (Package 2).
The goals of the Revenue Contract Solicitation (RCS) were to select a Respondent with extensive experience operating outdoor billboards and advertising.
Procurement Information
On Sept. 28, 2020, the Aviation Department issued RCS 21-004 and responses were due Dec. 4, 2020 by 10 a.m. (local AZ time). Three responses were received on Dec. 4, 2020. Two Respondents were issued a Determination of Non-Responsiveness due to the firms’ failure to comply with the Solicitation requirements. One Respondent was deemed responsive.
On Feb. 8, 2021, the evaluation panel met and evaluated the responsive Respondent based on the published evaluation criteria:
- Proposed Minimum Annual Guarantee (MAG) (400 points);
- Business and marketing plan (350 points); and
- Qualifications and experience (250 points).
The Panel recommendation was reached by consensus of the panel in consideration of these criteria.
After a local and national outreach effort and a competitive solicitation, Becker Boards Small, LLC is recommended for award of the Billboard Concessions Lease for both Packages 1 and 2, with 810 out of 1,000 points for both packages.
The City Transparency Policy is in effect until the contract resulting from this RCS is awarded by City Council.
Public Outreach
A Business Information Meeting was held on Sept. 1, 2020. A Pre-Proposal Meeting was held on Oct. 7, 2020.
Contract Term
The term will be 10 years, with one 10-year renewal option, which shall be exercised at the sole discretion of the Director of Aviation Services.
Financial Impact
First year annual revenue will be approximately $685,000 (MAG) or 60 percent of gross sales, whichever is greater. For every year thereafter, MAG shall be adjusted to 75 percent of the prior years’ annual rent payment or 100 percent of the previous year’s MAG, whichever is greater.
Concurrence/Previous Council Action
The Phoenix Aviation Advisory Board recommended approval of this item on April 15, 2021, by a vote of 8-1.
Location
Phoenix Sky Harbor International Airport - 3400 E. Sky Harbor Blvd.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.