Title
Amendment to Bimbo Bakeries USA, Inc., Ground Lease No. 151988 at Phoenix Sky Harbor International Airport (Ordinance S-51370) - District 8
Description
Request to authorize the City Manager, or his designee, to amend Ground Lease No. 151988 (Lease) with Bimbo Bakeries USA, Inc. for real property located at 3115 E. Madison Street by adding an additional 25,000 square feet to the Premises for parking.
Report
Summary
Bimbo Bakeries USA, Inc. currently leases 165,603 square feet of land at 3115 E. Madison St. for parking delivery vehicles as well as tractor trailer trucks. Bimbo Bakeries USA, Inc. is requesting to lease an additional 25,000 square feet of land for parking tractor trailers related to its bakery operation at 738 W. Van Buren Street in Phoenix. If amended, the total leased space will be 190,603 square feet.
Contract Term
This amendment does not change the term of the Lease, which has two one-year options to extend remaining and will expire in April 2028 if both options are exercised.
Financial Impact
Rent for the additional 25,000 square feet will be approximately $35,000 annually ($1.40 per square foot). Consistent with the Lease's adjusted rent provision, the additional square feet rent will be adjusted annually based on the Phoenix-Mesa-Scottsdale Consumer Price Index or three percent, whichever is greater. The additional square feet will generate $140,000 of revenue over the remaining term of the Lease. If all options to extend the term are exercised, the total anticipated revenue generated from the Lease will be $990,936.
Concurrence/Previous Council Action
The Phoenix Aviation Advisory Board recommended approval of the item on Oct. 17, 2024 by a vote of 5-0.
Location
Phoenix Sky Harbor International Airport, 3115 E. Madison Street
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.