Title
Reimburse Frontier for Terminal 3 Baggage Service Office Build Out
Description
Request to authorize the City Manager, or his designee, to issue terminal rent credits to reimburse Frontier Airlines (Frontier) up to $217,190, for the construction of a Baggage Service Office (BSO) in Terminal 3 (T3) at Phoenix Sky Harbor International Airport (PHX).
Report
Summary
Frontier currently operates approximately 28 flights per day at PHX and due to this flight growth, they have determined a need for a dedicated BSO to better serve their passengers. Frontier requested approximately 288 square feet for a BSO. All BSO spaces built out by PHX during the T3 Modernization Project are currently under lease and occupied by other T3 airlines. As a result, there is no vacant BSO available space to lease to Frontier.
Frontier is willing to build out the BSO space as a terminal improvement. Staff is seeking approval to reimburse Frontier through terminal rent credits for the construction of an approximately 288 square foot BSO. The terminal rent credits would apply to the construction of the base BSO build components consisting of electrical, mechanical, plumbing & HVAC system connections, structural components and fire life safety systems in an amount up to $217,190. Frontier will be responsible for the cost of the interior BSO tenant improvements to meet their operational requirements. Upon completion of the BSO build, Frontier will then lease the BSO at the prevailing airport terminal rental rates.
Financial Impact
If approved, Aviation will apply a rental credit up to $217,190 to Frontier's terminal lease upon completion of the BSO build out. Rent paid by Frontier for the added BSO space will be approximately $48,764 per year based on FY2023-24 Airport Rates and Charges for terminal rental rate.
Location
Phoenix Sky Harbor International Airport, 2485 E. Buckeye Road
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and Aviation Department.