Title
DBRT Goodyear FBO, LLC dba Lux Air Lease Amendment (Ordinance S-50562)
Description
Request to authorize the City Manager, or his designee, to amend Fixed Base Operator (FBO) Lease 138997 with DBRT Goodyear FBO, LLC (dba Lux Air) to add additional premises for aircraft storage and a fuel farm expansion on vacant land at Phoenix Goodyear Airport (GYR).
Report
Summary
Lux Air operates an FBO concession operations at GYR. Lux Air has requested to lease approximately 60,000 square feet of land that is currently underutilized automobile parking lot, to convert it to aircraft parking space. Additionally, Lux Air has requested to lease approximately 24,500 square feet of land to expand its fuel farm and increase their fueling capacity. This land was previously leased to Lufthansa Flight Training as an aircraft fuel farm. Lux Air intends to make tenant improvements to both premise locations at a total estimated cost of $1.25 million.
Contract Term
The additional premises will be added to Lease 138997 which expires on April 9, 2053.
Financial Impact
Rent for the aircraft parking premises will be at the rate of $0.38 per square foot, or approximately $22,800 per year. One year after the airport parking premises is added to the Lease, rent will be adjusted annually based on the Phoenix-Mesa-Scottsdale Consumer Price Index (CPI). Anticipated revenue for the aircraft parking premises over the remaining term of the Lease will be approximately $684,000. Revenue from expanding the fuel farm capacity will be in the form of a fuel flowage fee, which is currently $0.14 per gallon. The fuel flowage fee is adjusted annually per the CPI.
Concurrence/Previous Council Action
The Phoenix Aviation Advisory Board, Business and Development Subcommittee recommended approval of the item on Jan. 4, 2024 by a vote of 3-0.
The Phoenix Aviation Advisory Board recommended approval of the item on Jan. 18, 2024 by a vote of 6-0.
Location
Phoenix Goodyear Airport, 1658 S. Litchfield Road, Goodyear, Ariz.
Council District: Out of City
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.