Title
Amend Lease with JMJ-LLC, dba Cafe on the Way, to Extend Lease Term (Ordinance S-43902)
Description
Request to authorize the City Manager, or his designee, to enter into Amendment 3 to Food & Beverage Lease 123391 (Lease) with JMJ-LLC, dba Cafe on the Way, to extend the term for one year. The Lease requires JMJ-LLC to pay the greater of seven percent of gross sales or a minimum annual guarantee rent. The amendment may contain other terms and conditions deemed necessary or appropriate by the City Manager or his designee.
Report
Summary
The Phoenix Sky Harbor International Airport Rental Car Center (RCC) is in the process of a reconfiguration and tenant relocation project (Project). The Project includes the lobby area where the food and beverage concession is located. The project will include demolition and new construction in the lobby, which may impact this concession.
JMJ-LLC began operating at the RCC after the Lease was assigned to it on March 1, 2012. JMJ-LLC replaced the original operator through a limited solicitation process. The concession occupies 1,094 square feet and provides a quick-serve menu and vending machines to serve RCC customers. Over the next year, Aviation staff will conduct a revenue contract solicitation for this location. The successful respondent will be able to complete its tenant improvements on schedule with the completion of the Project. A one-year extension of the term of the Lease will avoid an interruption of services to RCC customers.
Contract Term
The term of the Lease will be extended from Jan. 1, 2018 to Dec. 31, 2018.
Financial Impact
The Lease requires JMJ-LLC to pay the greater of seven percent of gross sales or a minimum annual guarantee rent. In 2016, JMJ-LLC generated $740,679 in gross sales and paid $51,848 in rent. Rent collected from JMJ-LLC is used to offset operation and maintenance costs for the RCC.
Location
Phoenix Sky Harbor International Airport is located at 3400 E. Sky Harbor Blvd.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Aviation Department.