Title
United Parcel Services, Inc. Ground Lease for Exclusive-Use Ramp Space at Phoenix Sky Harbor International Airport
Description
This report requests that the Transportation, Infrastructure, and Innovation Subcommittee recommend City Council approval to enter into a Ground Lease Agreement with United Parcel Services, Inc. (UPS) to lease approximately 46,000 square feet of exclusive-use ramp space for cargo processing within the South Air Cargo facility at Phoenix Sky Harbor International Airport (PHX) for five years with no options to renew. Estimated revenue to the City over the term will be approximately $207,000.
THIS ITEM IS FOR CONSENT ACTION.
Report
Summary
Currently, UPS leases 47,385 square feet of cargo space within the South Air Cargo facility. To increase capacity, UPS exclusively utilizes trade fixtures, installed by UPS, on the South Air Cargo ramp for cargo operations. This Ground Lease Agreement will provide UPS with approximately 46,000 square feet of exclusive ramp space around UPS’s trade fixtures for their cargo processing.
Contract Term
The term will be for five years with no options to renew.
Financial Impact
Annual rent will be approximately $41,400 ($0.90 per square foot) plus applicable taxes. Rent will be adjusted annually thereafter by three percent or the Consumer Price Index using the Phoenix-Mesa-Scottsdale index, whichever is greater. The total anticipated revenue over the term will be approximately $207,000.
Concurrence/Previous Council Action
This item was recommended for approval by the Phoenix Aviation Advisory Board (PAAB) on May 21, 2020, by a vote of 7-0.
Location
Phoenix Sky Harbor International Airport, 3400 E. Sky Harbor Blvd.
Council District: 8
Department
Responsible Department
This item is submitted by Assistant City Manager Deanna Jonovich and the Aviation Department.