Title
Ground Lease with SGP Deer Valley LLC at Phoenix Deer Valley Airport (Ordinance S-48249)
Description
Request to authorize the City Manager, or his designee, to enter in to a ground lease with SGP Deer Valley LLC for up to 175,000 square feet of land at Phoenix Deer Valley Airport for 30 years with two five-year options to extend the term, that may be exercised by the Director of Aviation Services. Further request to authorize the City Treasurer to accept all funds related to this item.
Report
Summary
SGP Deer Valley LLC (SGP) specializes in constructing facilities for sublease to United States Government agencies. SGP has requested to lease up to 175,000 square feet (approximately 4 acres) of land at Phoenix Deer Valley Airport to construct a hangar and related supporting facilities for sublease to the U.S. Government.
Contract Term
The term of the lease will be 30 years which may include two five-year options to extend the term which may be exercised at the sole discretion of the Director of Aviation Services.
Financial Impact
Rent for the first year of the lease will be approximately $94,500 ($0.54 per square foot) and will be adjusted annually based on the Phoenix-Mesa-Scottsdale Consumer Price Index. Total anticipated revenue over the 30-year primary term of the lease will be approximately $2,835,000.
Concurrence/Previous Council Action
This Phoenix Aviation Advisory Board recommended this item to the Phoenix City Council at the Board's meeting on Nov. 18, 2021 by a vote of 7-0.
Location
Phoenix Deer Valley Airport - 702 W. Deer Valley Road
Council District: 1
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.