Title
Amendment to Lease with Arizona State Lottery at Phoenix Sky Harbor International Airport (Ordinance S-46631)
Description
Request to authorize the City Manager, or his designee, to amend Lease 141902 with Arizona State Lottery (AZ Lottery) to increase their footprint at the Phoenix Sky Harbor International Airport (PHX) from one location to three locations; convert the current contract to a standard concessions lease; restructure rent to percent of total sales; and extend the contract by two years, expiring Dec. 31, 2024.
Report
Summary
AZ Lottery currently leases 500 square feet of space for one service counter and one lottery vending machine in the baggage claim area of Terminal 4 (T4) at PHX. This space has historically generated over $1 million in annual sales. AZ Lottery is in good standing with the Aviation Department and has requested to expand their presence at PHX by adding two additional lottery vending locations post security in T4 on the N2 and N3 concourses, and restructure their current contract to a revenue sharing concessions lease. In addition, AZ Lottery has requested to extend their contract an additional two years to allow for the adjustment of the revenue structure and provide them an opportunity to recoup their investment in new equipment. If all options to extend are exercised under the current contract provisions, the contract term is set to expire Dec. 31, 2022.
Contract Term
Extend the contract for two additional years, expiring Dec. 31, 2024.
Financial Impact
Restructure the current rent to 6.5 percent of total sales. Total proposed revenue with additional points of sale will be approximately $107,250 per year.
Location
Phoenix Sky Harbor International Airport Terminal 4
Council District: 8
Department
Responsible Department
This item is submitted by Assistant City Manager Deanna Jonovich and the Aviation Department.