Title
Modify Proposed Contract Term for Airport Advertising Revenue Contract Solicitation at Phoenix Sky Harbor International Airport (Ordinance S-53144) - District 8
Description
Request to authorize the City Manager, or the City Manager's designee, to amend the Airport Advertising Revenue Contract Solicitation (RCS) to modify the proposed contract term previously approved by the City Council from a seven-year initial term with one three-year option to extend the term to a 12-year initial term with one three-year option to extend the term. All other proposed business terms and conditions in the original Request to Issue (RTI) previously approved by the City Council remain unchanged.
Report
Summary
On Dec. 17, 2025, the City Council approved the Aviation Department’s RTI an RCS for airport advertising services. These services will require an airport advertising company to install, maintain, and manage advertising at Phoenix Sky Harbor International Airport, Rental Car Center, Phoenix Deer Valley Airport, Phoenix Goodyear Airport, and other designated areas (collectively, Airports).
Following feedback from interested airport advertising companies during the Aviation Business Information Meetings, the current industry standard contract term has increased to up to 15 years, reflecting the longer life cycle of modern digital advertising technology. Additionally, the RTI's proposed initial contract term of seven years with one three-year option to extend the term was developed based on the then-anticipated timeline for the West Terminal becoming operational around 2036. Because the new timeline for the West Terminal is expected to become operational in 2033, modifying the RCS contract term to a 12-year initial term with one three-year option to extend the term allows the advertising program to be seamlessly incorporated into the West Terminal planning and construction and to maintain consistent technology standards across all facilities. Furthermore, the change in the lease term best positions the Aviation Department for continuity in advertising operations to: support a cohesive Airport-wide advertising strategy, maintain a premium Airport-wide digital advertising media infrastructure, and maximize revenue generation for the Airports. All other proposed business terms and conditions in the original RTI previously approved by the City Council remain unchanged.
Contract Term
The proposed term of the new Airport Advertising Services concession lease will be a 12-year initial term with one three-year option to extend the term at the sole discretion of the Aviation Director.
Financial Impact
Rent will be based on the minimum annual guarantee (MAG) or a percentage of gross sales from the advertising concession program, whichever is greater. MAG and the percentage of gross sales will be finalized when the RCS is published.
Public Outreach
This RCS process will include all standard and required outreach efforts and will conduct targeted outreach efforts to attract interested parties.
Concurrence/Previous Council Action
The Phoenix Aviation Advisory Board Business and Development Subcommittee approved this item on Oct. 3, 2025, by a vote of 3-0.
The Phoenix Aviation Advisory Board approved this item on Oct. 16, 2025, by a vote of 6-0.
The Transportation, Infrastructure and Planning Subcommittee approved this item on Nov. 19, 2025, by a vote of 4-0.
The Phoenix Aviation Advisory Board Business and Development Subcommittee approved this item on Aug. 6, 2026, by a vote of 3-0.
The Phoenix Aviation Advisory Board approved this item on Aug. 24, 2025, by a vote of 9-0.
Location
Phoenix Sky Harbor International Airport, 2485 E. Buckeye Road, Phoenix, Arizona, 85034.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Frank McCune and the Aviation Department.