Title
New Facility Lease Agreement with AGI Ground, Inc. at Phoenix Sky Harbor International Airport - District 8
Description
This report requests the Transportation, Infrastructure, and Planning Subcommittee recommend to the City Council to enter into a facility lease agreement with AGI Ground, Inc. (AGI) to lease up to 5,760 square feet of space in Building A of the West Air Cargo complex at Phoenix Sky Harbor International Airport (PHX).
THIS ITEM IS FOR CONSENT ACTION.
Report
Summary
AGI currently provides ground handling support services to AeroMéxico and WestJet airlines under Commercial Use Permit 529-26. AGI recently expanded its services agreement with AeroMéxico to include cargo handling operations. To support this cargo handling operation and to provide covered storage for its ground handling equipment, AGI requests to lease two cargo bays with a total square footage of 3,840 in Building A of the West Air Cargo complex. The lease agreement will include an option for AGI to lease one additional cargo bay of 1,920 square feet, contingent upon AGI securing additional cargo handling contracts with other airlines at PHX. AGI will also be required to complete tenant improvements to separate its leased cargo bay space in Building A from the adjacent, non-leased cargo bay areas, within six months of the new facility lease agreement's effective date.
Contract Term
The lease term will be three years, with three one-year options to extend the term at the sole discretion of the Aviation Director.
Financial Impact
AGI will pay a rental rate per square foot per year as established and annually adjusted according to the Airport Rates and Charges program authorized under Phoenix City Code section 4-173(B).
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.
Location
Phoenix Sky Harbor International Airport, 2485 E. Buckeye Road
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Amber Williamson and the Aviation Department.