Title
Hangar Lease Amendments with State of Arizona Department of Public Safety at Phoenix Sky Harbor International Airport (Ordinance S-50265)
Description
Request to authorize the City Manager, or his designee, to amend Corporate Hangar Lease 142410 and Executive Hangar Lease 152019 with the State of Arizona Department of Public Safety at Phoenix Sky Harbor International Airport to extend the Term until Jan. 31, 2026, with two one-year options.
Report
Summary
State of Arizona Department of Public Safety (DPS) entered into Corporate Hangar Lease 142410 in April 2016 and Executive Hangar Lease 152019 in March 2020. Lease 142410 is scheduled to terminate in October 2024 and Lease 152019 is scheduled to terminate in February 2024. DPS is requesting that the Leases be extended until Jan. 31, 2026, with two one-year options. The hangars are used for the storage and allowed maintenance of DPS’s approved aircraft and for no other use or purpose without the consent of the Director of Aviation Services.
Contract Term
The amended lease term will be extended until Jan. 31, 2026, with two one-year options to extend that may be exercised at the sole discretion of the Director of Aviation Services.
Financial Impact
Current rent for Lease 142410 is approximately $143,965 per year ($11,997 monthly) and Lease 152019 is approximately $17,663 per year ($1,472 monthly). Combined annual rent is approximately $161,628 ($13,469 monthly). Rent will be adjusted per the Phoenix-Mesa-Scottsdale Consumer Price Index or three percent, whichever is greater, each year of the extension. The total anticipated revenue over the extension, if all options are exercised, will be approximately $537,067.
Concurrence/Previous Council Action
The City Council approved:
- Lease 142410 (Ordinance S-40238) on Oct. 2, 2013;
- Lease 142410 - Amendment (Ordinance S-46941) on Sept. 16, 2020; and
- Lease 152019 (Ordinance S-46215) on Dec. 2, 2019.
The Phoenix Aviation Advisory Board recommended approval of this item on Sept. 21, 2023, by a vote of 6-0.
Location
Phoenix Sky Harbor International Airport - 2615 & 2629 E. Air Lane
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.