Title
Authorization to Enter into a New Ground Lease Agreement with Swissport Fueling, Inc. for Aircraft Lavatory Services Facility (Ordinance S-51420) - District 8
Description
Request to authorize the City Manager, or his designee, to enter into a new ground lease agreement (New Ground Lease) with Swissport Fueling, Inc. (Swissport Fueling) for an aircraft lavatory service facility at Phoenix Sky Harbor International Airport (PHX). Further request to authorize the City Treasurer to accept all funds related to the New Ground Lease.
Report
Summary
Under Ground Lease No. 135697, Swissport Fueling leases approximately 6,450 square feet to operate an aircraft lavatory service facility, also known as a triturator facility. The lease is set to expire on January 23, 2025, and Swissport Fueling desires to enter into a New Ground Lease to continue operating the triturator facility. Aviation staff requests to terminate Ground Lease No. 135697 on December 31, 2024, and enter into a New Ground Lease commencing January 1, 2025, to align the same commencement date and termination date for this New Ground Lease with two additional ground leases with Swissport Fueling at PHX.
Contract Term
The term of the New Ground Lease is five years, commencing on January 1, 2025, and will expire on December 31, 2029. Provisions of the New Ground Lease will also include five, one-year options to extend the term that may be exercised at the sole discretion of the Aviation Director.
Financial Impact
Rental rate for the first year of the New Ground Lease will be $1.40 per square foot, which is approximately $9,030 annual revenue. Rent will be adjusted annually based on the Phoenix-Mesa-Scottsdale Consumer Price Index or three percent, whichever is greater. Total revenue anticipated over the term of the New Ground Lease would be approximately $90,300 if all options to extend are exercised.
Concurrence/Previous Council Action
The Phoenix Aviation Advisory Board recommended approval of this item on October 17, 2024, by a 5-0 vote.
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.