Title
DP64, LLC Executive Hangar Lease - Amendment (Ordinance S-48605)
Description
Request to authorize the City Manager, or his designee, to execute an amendment to Executive Hangar Lease 138896 with DP64, LLC located at Phoenix Sky Harbor International Airport to extend the term for five years with three one-year options, for a total extension of up to eight years.
Report
Summary
The purpose of this amendment is to extend the term of the lease for five years with three one-year options, for a total extension of up to eight years, to be exercised at the sole discretion of the Director of Aviation Services.
The City of Phoenix and DP64, LLC entered into Executive Hangar Lease 138896 on July 1, 2014 for Executive Hangar 26. The Lease is scheduled to terminate on Dec. 31, 2022. DP64, LLC is requesting to extend the term of the lease. The hangar is used for the storage and allowed maintenance of DP64, LLC’s approved aircraft and for no other use or purpose without the consent of the Aviation Director.
Contract Term
This amendment will extend the end date of the lease from Dec. 31, 2022 to Dec. 31, 2027, plus three additional one-year options to extend, to be exercised at the sole discretion of the Aviation Director.
Financial Impact
Current rent is approximately $38,005 per year ($3,167 monthly). Total rent over the extended term of the lease will be approximately $304,040. Rent will continue to be adjusted annually based on the Phoenix-Mesa-Scottsdale Consumer Price Index (CPI) or three percent, whichever is greater.
Concurrence/Previous Council Action
The City Council approved:
- Executive Hangar Lease 138896 (Ordinance S-40620) on March 19, 2014; and
- Executive Hangar Lease 138896 - Amendment (Ordinance S-45616) on May 1, 2019.
The Phoenix Aviation Advisory Board recommended approval of this item on March 17, 2022, by a vote of 9-0.
Location
Phoenix Sky Harbor International Airport - 3705 E. Air Lane
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.