Title
United Parcel Service, Inc. Ground Lease within the East Tonto Lot at Phoenix Sky Harbor International Airport
Description
This report requests that the Transportation, Infrastructure, and Innovation Subcommittee recommend City Council approval to enter into a Ground Lease Agreement with United Parcel Service, Inc. (UPS) to lease approximately two acres for parking employee vehicles and tractor trailers in the East Tonto Lot at Phoenix Sky Harbor International Airport (PHX) for one year with four, one-year renewal options. Estimated revenue to the City over the term, if all options are exercised, will be approximately $457,380.
THIS ITEM IS FOR CONSENT ACTION.
Report
Summary
Annually, UPS has temporary licensed space within the East Tonto Lot located at 610 S. 24th St. during peak season for employee and tractor trailer parking. Since the beginning of 2020, UPS has been experiencing peak season numbers daily. Therefore, UPS is requesting year-round space within the East Tonto Lot. This new Ground Lease Agreement will provide UPS with approximately two acres of parking.
Contract Term
The term will be one year with four, one-year renewal options to be exercised at the sole discretion of the Director of Aviation Services.
Financial Impact
Annual rent will be approximately $91,476 ($1.05 per square foot) plus applicable taxes. Rent will be adjusted annually thereafter by three percent or the Consumer Price Index (CPI) using the Phoenix-Mesa-Scottsdale index, whichever is greater. The total anticipated revenue over the term, if all options are exercised, will be approximately $457,380.
Concurrence/Previous Council Action
This item was recommended for approval by the Phoenix Aviation Advisory Board (PAAB) on May 21,2020, by a vote of 7-0.
Location
610 S. 24th St. (East Tonto Lot), Phoenix, Arizona
Council District: 8
Department
Responsible Department
This item is submitted by Assistant City Manager Deanna Jonovich and the Aviation Department.