Title
Ground Lease with Custom Pipe & Fabrication, Inc. at Phoenix Sky Harbor International Airport - Amendment (Ordinance S-48246)
Description
Request to authorize the City Manager, or his designee, to execute an amendment to ground lease 151989 with Custom Pipe & Fabrication, LLC at 2739 E. Washington Street, to extend the term to April 28, 2024 by adding two additional one-year options to extend.
Report
Summary
Custom Pipe & Fabrication, Inc., is located at 302 S. 28th Street, and they currently lease 70,000 square feet of paved property at 2739 E. Washington Street for the storage of piping products. Tenant is requesting two additional one-year options to be added to the lease.
Contract Term
The current contract term is two years, expiring April 28, 2022, with no options to extend. The term may be extended to April 28, 2024, if two additional one-year extension options are exercised at the discretion of the Aviation Director. The contract also has a 30-day cancellation notice by either party.
Financial Impact
Rent will be approximately $77,976 per year ($1.11 per square foot). Rent will be adjusted annually based on the Phoenix-Mesa-Scottsdale Consumer Price Index or three percent, whichever is greater. Total anticipated rent over the term of the lease will be approximately $158,291, if all options are exercised.
Concurrence/Previous Council Action
The City Council approved Ground Lease 151989 (Ordinance S-46387) on Feb. 19, 2020.
The Phoenix Aviation Advisory Board recommended this item for approval on Nov. 18, 2021, by a vote of 7-0.
Location
2739 E. Washington St.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.