Title
Airport Childcare Provider Award Recommendation (Ordinance S-52029) - District 8
Description
Request to authorize the City Manager, or his designee, to enter into a new facility lease with KinderCare Education at Work, LLC, dba KinderCare for Employers, to build out and operate a childcare facility at Phoenix Sky Harbor International Airport.
Report
Summary
As part of the City of Phoenix allocation of American Rescue Plan Act (ARPA) funds, the Phoenix City Council undertook a review of departments and programs to identify areas where additional support could help essential workers.
As part of this effort, the City Council adopted an ARPA funding strategic plan on June 8, 2021. One element of the plan was to provide childcare support to essential workers at Phoenix Sky Harbor International Airport (Airport). The Aviation Department was allocated $5 million as part of that process for badged Airport workers.
A key element of this program is the construction of a childcare facility at the 44th Street Sky Train station. The Aviation Department is building a facility shell with airport revenues, and issued a Revenue Contract Solicitation for a childcare provider to build-out, operate, and manage a quality affordable childcare facility. The selected provider will provide a safe, healthy, and nurturing environment for the children of eligible Airport employees and workers of City of Phoenix and its tenant contractors, lessees, and licensees. Services could also be offered to the general public on a space-available basis should Airport worker demand for services not materialize.
The solicitation included requirements for the operator to work with the Aviation Department to build out the facility, make tenant improvements to the facility in accordance with childcare best practices, and operate the facility in compliance with state requirements.
Staff worked throughout the procurement process to solicit and incorporate industry feedback in the final agreement terms, including adjusting lease terms to allow amortization of capital investment.
The procurement was paused to address a timely protest related to the procurement process. Subsequently, the Aviation Department convened a second, independent evaluation panel. Both panels recommended proceeding with KinderCare Education at Work, LLC, dba KinderCare for Employers, as the recommended awardee.
Procurement Information
The Aviation Department issued AVN RCS 24-001 on January 10, 2024.
The proposals were evaluated and scored by an evaluation panel through consensus scoring on the following criteria:
•Overall qualification and experience of the respondent and key personnel (up to 375 points).
•Method of approach and management, marketing, operations, and technology plans (up to 350 points).
•Design of the childcare service facility (up to 275 points).
KinderCare Education at Work, LLC, dba KinderCare for Employers, is the responsive and responsible bidder and is the recommended contractor for the award of this contract.
•KinderCare Education at Work, LLC, dba KinderCare for Employers: 865 points
•Bright Beginnings: 640 points
Contract Term
The initial term of the lease will be for 12-18 months to allow for facility construction, followed by a primary lease term of 10 years, and two, five-year options to extend which may be exercised at the sole discretion of the Aviation Director.
Financial Impact
To support the construction of the childcare facility, the Aviation Department is providing approximately $3.8 million in Capital Improvement Funds to construct the facility shell. Additionally, the department will be applying $3 million in ARPA funds to tenant improvements to the facility once the operator is approved by the City Council.
Based on the feedback provided during the pre-proposal process and given the pioneering nature of this initiative and solicitation, the Aviation Department has determined it is appropriate to waive rent through the fifth year of the primary lease term.
The operator will be subject to a net rental rate of $132,620 per year commencing the sixth year of the primary term.
Location
Phoenix Sky Harbor International Airport - 2485 E. Buckeye Road
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.