Title
Concession Lease for Shoe Shine Services (Ordinance S-44134)
Description
Request to authorize the City Manager, or his designee, to enter into a lease with Goodfellows Shoeshine - Phoenix, Inc., to provide shoe shine services and approved foot/shoe care merchandise at Phoenix Sky Harbor International Airport. Further request authorization for the City Controller to accept and disburse all funds related to this item. Goodfellows Shoeshine - Phoenix, Inc., will pay the greater of a Minimum Annual Guarantee (MAG) or Percent Rent of 5 percent of gross sales for shoe shine services and 16 percent of gross sales for shoe/foot care merchandise. The MAG for the first year will be $41,777.
Report
Summary
Shoe shine services have been a longstanding amenity offered to travelers utilizing Phoenix Sky Harbor International Airport. This service will be offered in six locations in three terminals and will provide customers with polish and shine services for shoes, boots and other footwear. The operator may sell approved shoe/foot care merchandise at specified locations as approved by the Aviation Director. The locations, units and services may be adjusted to meet evolving customer and Airport needs at the sole discretion of the Aviation Director.
Procurement Information
Solicitation AVN RCS 17-037, Shoe Shine Concession, was conducted in accordance with Administrative Regulation 3.10. The Aviation Department issued a Revenue Contract Solicitation (RCS) for Shoe Shine Concession services on Sept. 5, 2017. Four proposals were received and found responsive. Goodfellows Shoeshine - Phoenix, Inc., is the successful respondent with a Minimum Annual Guarantee (MAG) of $41,777.
Qualified Respondent Proposed First-Year MAG:
Goodfellows Shoeshine - Phoenix, Inc.: $41,777
Sunshine Shoeshine: $29,075
Cactus Shoeshine: $24,000
The Classic Shine Company: $20,000
Contract Term
The lease term is three years starting Jan. 1, 2018, with two one-year options to extend the term at the discretion of the Aviation Director.
Financial Impact
Goodfellows Shoeshine - Phoenix, Inc., will pay the greater of a Minimum Annual Guarantee (MAG) or Percent Rent of 5 percent of gross sales for shoe shine services and 16 percent of gross sales for shoe/foot care merchandise. The MAG for the first year will be $41,777. The MAG will be adjusted annually at 85 percent of the annual rent revenues paid during the preceding year. MAG will not fall below the proposed amount for year one.
Public Outreach
The shoe shine concession opportunity was advertised in the following publications or newsletters: The Airport Council International, Airport Minority Advisory Council, Federal Aviation Administration Opportunities Bid Board, and Phoenix Sky Harbor Website. The announcement was also sent to more than 100 individuals from the Aviation Department’s interest list. A pre-response meeting was held on Sept. 8, 2017.
Concurrence/Previous Council Action
This item was unanimously recommended for approval by the Phoenix Aviation Advisory Board on Nov. 16, 2017.
Location
Phoenix Sky Harbor International Airport is located at 3400 E. Sky Harbor Blvd.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Aviation Department.