Title
Ground Lease with Southwest Airlines Co. (Ordinance S-45181)
Description
Request to authorize the City Manager, or his designee, to enter into a new ground lease with Southwest Airlines Co. (Southwest) for cargo transfer operations. Estimated revenue to the City if all options are exercised is approximately $46,767, not including Consumer Price Index adjustments.
Report
Summary
Southwest is currently leasing approximately 5,100 square feet of land for its cargo transfer point operations near the Terminal 4 South 4 concourse on the ramp/apron level. The current lease expires Dec. 31, 2018. Southwest has requested to enter into a new ground lease to continue leasing this area for its cargo operation.
Contract Term
The term will be five years, with two one-year options to extend at the sole discretion of the Aviation Director.
Financial Impact
The rent for the ground lease will be approximately $1.31 per square foot for the first lease year. The rent will be adjusted annually based on Phoenix-Mesa Consumer Price Index. The annual estimated revenue to the City is approximately $6,681.
Concurrence/Previous Council Action
This item was recommended for approval by the Aviation and Transportation Subcommittee on Nov. 27, 2018, by a vote of 3-0.
Location
Phoenix Sky Harbor International Airport, 3400 East Sky Harbor Blvd.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Aviation Department.