Title
United Parcel Service, Inc. Ground Lease for Exclusive-Use Ramp Space at Phoenix Sky Harbor International Airport (Ordinance S-46765)
Description
Request to authorize the City Manager, or his designee, to enter into a Ground Lease Agreement with United Parcel Service, 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 for five years with no options to renew. Estimated revenue to the City over the term will be approximately $207,000. Further authorizing the City Treasurer to accept funds related to this item.
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.
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.