Title
GPT GIG BOA PORTFOLIO OWNER, LLC and RT Sky Harbor, LLC Ground Lease Amendment (Ordinance S-49980)
Description
Request to authorize the amendment of Ground Lease Agreement 48819 with GPT GIG BOA PORTFOLIO OWNER LLC (GPT) and Ground Lease Agreement 102545 with RT Sky Harbor, LLC by requesting that the extension option on Lease 48819 be approved and in exchange the $11 million capital improvement be transferred to Lease 102545 with the condition that the capital improvement investment be completed as a condition to exercise the first extension option for Lease 102545.
Report
Summary
The current premises consist of three separate parcels within Sky Harbor Center under two separate Ground Lease Agreements (Lease 48819 and Lease 102545). GPT is the tenant under Lease 48819 and RT Sky Harbor, LLC is the tenant under Lease 102545. GPT and RT Sky Harbor, LLC are owned by the same corporation, Link Logistics, LLC which is a division of Blackstone. Lease 48819 currently has a provision that GPT must spend $11 million in capital improvements to the premises in order to achieve a 14-year lease extension option. Lease 102545 currently has no capital investment improvement provisions and has three extension options. Both parties are requesting that the extension option on Lease 48819 be approved and in exchange the $11 million capital improvement investment be transferred to Lease 102545 with the requirement that the capital improvement investment be completed as a condition to exercise the first extension option under Lease 102545.
Contract Term
The current term for Lease 48819 will expire in 2053. This action will amend the term to Nov. 29, 2067. The current term for Lease 102545 ends Nov. 30, 2067. This action will amend the term by adding the required capital improvement investment condition for the extension options.
Financial Impact
There is no financial impact.
Concurrence/Previous Council Action
The City Council approved:
- Ground Lease 48819 Amendments (Ordinance S-22521, Ordinance S-45116 and Ordinance S-267373) on Jan. 11, 1995, on Nov. 7, 2018, and on Aug. 31, 2022; and
- Ground Lease 102545 Amendment (Ordinance S-37964) on June 8, 2011.
Location
Phoenix Sky Harbor International Airport - 1825 E. Buckeye Road
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.